Evaluation methodological approach

What is meant by SWOT analysis?

Definition

General definition

SWOT analysis (Strengths - Weaknesses - Opportunities - Threats) is a strategy analysis tool. For example, it combines the study of the strengths and weaknesses of an organisation, a geographical area, or a sector, with the study of the opportunities and threats to their environment. As such, it is instrumental in development strategy formulation.
For strategy, this approach takes into account internal and external factors, with a view to maximising the potential of strengths and opportunities, while minimising the impact of weaknesses and threats.

Rationale of SWOT analysis 

In evaluation

This tool is mainly used during the ex ante evaluation of programmes. SWOT analysis describes positive and negative aspects and identifies the factors in the environment which may positively or negatively influence projects. By so doing, this analysis reduces uncertainties and supports the strategy's improvement or its assessment.
SWOT analysis belongs to the group of tools studying the relevance and possible coherence of specific programmes or entire strategies.

Various types of SWOT analysis

Many adaptations and interpretations have emerged from the implementation of SWOT analysis. Some of its four components may vary with the needs of the analysis, such as supporting the planning of development schemes or analysis of the geographical areas, determining and validating strategies or ex ante evaluations. Thus, in addition to SWOT, other acronyms include:

• SWOL: Strengths, Weaknesses, Opportunities, Limitations
• SWPO: Success, Weaknesses, Potentials, Obstacles
• SWAP: Successes, Weaknesses, Aims, Problems
• SOFT: Successes, Opportunities, Failures, Threats

Apart from the refinements induced by these acronyms, these analyses share the same objective and will not be distinguished in this methodology.

Where does the tool come from?

SWOT analysis was originally used in the business field, where it is a highly structured model, combining a series of analytical tools which focus on the internal and external environment of the company.

SWOT's implementation rationale in the strategic field
(extracted from "Stratégique" - Pearson France edition)

Numerous summary charts, such as the one illustrated above, have resulted in many adaptations during the last 50 years (particularly for intermediary tools to prepare for SWOT analysis).
They can be adapted to the type of analysis to be carried out (for a company, an organisation, a geographical area or a sector) and to the context in which the analysis is conducted (for example, a strategy definition in evaluation).

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When is SWOT analysis appropriate for an evaluation?

In ex ante evaluation

SWOT analysis is commonly used for ex ante evaluations in European Union programmes. It supports the strategy planning process.

It may also play a crucial role during the drafting of the Country Strategy Papers (CSPs) and their subsequent evaluation.
SWOT analysis is also useful for project evaluations.

During the progressive building of the evaluation methodology

During the progressive building of the evaluation methodology, the drafting of a problem diagram is comparable to the process of determination of weaknesses and threats in SWOT analysis. The comparison of a problem diagram with an objectives diagram is a similar reflection process to that carried out during SWOT analysis.

Therefore, this tool can be used during the methodology development stage, with a view to examining the strategy's relevance to the situation in the country under evaluation.

When determining and checking strategic approaches

SWOT analysis can be used to identify possible strategic approaches. Although originally designed for planning, this tool is used in evaluation to ensure that the implemented strategy is appropriate to the situation described in the analysis.

Thus, it may either be used for:

• Ex ante evaluations, in order to determine or check strategic approaches
• Intermediary evaluations, in order to check the relevance of the programmes under evaluation, and if required, their coherence
• Ex post evaluations, in order to check the relevance and coherence of the strategy or the programme. Implementing a SWOT analysis is all the more essential when this task was not undertaken during the development of the strategy or the programme.

With which tools cant it be combined?

With tools to prepare for the SWOT analysis

For in-depth analyses, SWOT analysis is the result of the full or partial implementation of tools such as resources audit, analysis of best practice, and PESTEL analysis (Political, Environmental, Socio-cultural, Technological, Economic and Legal factors).

SWOT's intermediate tools in geographical or sector evaluation

Other possible combinations

• SWOT analysis may be part of the implementation of a focus group
• It may complement organisation tools, such as problem diagrams
• It may be followed by tools closely related to programme management, such as the BCG matrix (Boston Consulting Group)

SWOT analysis is therefore very flexible and can easily be combined with other tools.

What is required for its use in country evaluations?

Prerequisites

The prerequisites for its use in country evaluations almost exclusively relate to the selection of the participants. To find out more about this topic, see the recommendations in the methodologies for interview and focus group.

Overall, the most important questions to address are:

• Who should be requested to participate in the analysis?
• How can a fair distribution of participants from interest groups, and a balanced expression of opinions be ensured?
• How to avoid bias resulting from the influence of some groups over others?
• How many analyses should be undertaken to provide a satisfactory result?
• Where should these analyses be carried out (in the country under evaluation or with the relevant authorities, at the European Commission)?
• What language should be used?

When these questions are satisfactorily answered, the evaluator should benefit from the SWOT tool's contribution to the analysis and conclusions.

Examples of its use

Although not taken from country evaluations, a >series of examples> provide details about SWOT implementation and findings, and as such, it may be of interest to evaluators. With a view to illustrating a similar context to country evaluations, the examples selected are mainly from countries and regions included in the scope of development assistance.

What are its avantages and limitations?

Advantages

Determination of a strategy or a programme

SWOT analysis is a straightforward tool, which quickly underlines the adequacy (or inadequacy) of a strategy, in relation to the problems and issues under consideration.

In evaluation

When SWOT analysis is combined with strategic analysis of an ex ante evaluation, it supports decision-making and the incorporation of the strategic approaches within the evaluation.

Limitations

A subjective tool

Even when the tool is well conceived, it remains subjective. Indeed, analyses provided by separate groups on a given topic can differ greatly (strengths for one group can be weaknesses for others). Thus, consensus should be found prior to the analysis completion.
Moreover, distinguishing between internal and external factors may sometimes be challenging.

A simplistic tool

Similar to all tools that result in a matrix, SWOT analysis is reputed to be simplistic in approach.

Preconditions for SWOT analysis include:

• The topic under consideration (a development project or a country strategy)
• The number of participants and groups which have been selected to undertake the analysis (such as strategy designers, operators, and beneficiaries)
• The location(s) of the analysis (in Europe or in the country under evaluation)

What are the preconditions for its use? 

The time span

If conducted in a single location and with a limited number of participants (whose knowledge of the topic is precise), the analysis may benefit from a speedy implementation process. In this case, it will only need:

• A few days' preparation
• One day to gather the participants
• One day to complete the analysis

Conversely, if the analysis has to be more detailed (including the implementation of intermediary tools) and requires numerous participants, its time span may increase significantly.

Human resources

In addition to the participants, whose training concerning the methodologies is often completed during the session, a group moderator or a skilled facilitator is also strongly recommended.

Financial resources

The financial resources required to conduct a SWOT analysis fluctuate:

• A straightforward analysis, conducted for the progressive building of the evaluation, with a view to validating strategic decisions, is cost-effective.
• Conversely, a specific study during an ex ante evaluation, carried out to support the determination of strategic decisions, is expensive, especially if it includes travels to the country and several sessions.

The use of SWOT analysis in project evaluations

A SWOT analysis comparing different periods of time can be used in project evaluations to determine the components of the project which should be strengthened in the future.

SWOT analysis can also enable stakeholders to undertake a study of the project's context by themselves.

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How is the level of analysis chosen?

An essential stage

Determining the sector to which the SWOT analysis will be applied is required prior to its implementation.
This stage is usually straightforward for a company: the company represents the internal factor, whereas the market, the competition and the company's environment represent the external factors.
Conversely, in development assistance, this stage is a precondition to ensure the participants' full understanding of the questions addressed to them.

Various levels

• If the focus of the analysis is the agency (for example, the European Commission), the object of the internal analysis is the agency, while the object of the external analysis is the country.
• If the main object of the analysis is the country, the internal analysis focuses on the country while the external analysis focuses on neighbouring countries and the rest of the world.
• If the object of the analysis is a sector, every action carried out in this sector constitutes an internal factor, and the rest represent external factors.

Distinction between the SWOT's internal and external levels

How should the session be prepared?

Various approaches can be developed in SWOT analysis, from the simplest (a half-a-day-session with a limited number of participants) to the most sophisticated (an analysis resulting from the implementation of various strategy analysis tools prior to a SWOT analysis).

Basics

Prerequisites for the working sessions

Whatever the methodology, the preparation of meetings should include, as a minimum, documentary analysis and interviews with key resource people. This stage ensures that all the essential topics are covered. It also enables the evaluator to organise further discussions on important topics, which may not have been sufficiently developed by the participants during the sessions.
The availability of a problem diagram is extremely helpful during the preparation stage.

Group selection

Planning how to select the group, its size and its possible division into subgroups (thematic, regional, types of actors, etc.) is also crucial at this stage. The methodology for focus groups provides details about such a selection.
 

What is the role of the group moderator?

Undertaking SWOT analysis without a group moderator and an executive secretary is almost impossible. The executive secretary can be selected from the participants (this is not always possible, however), but the evaluation team must include a group moderator.

The moderator's role is paramount in the conduct of the session. Among other tasks, the moderator helps with:

• Conducting the sessions
• Reporting the participants' contributions to the session
• Marshalling common ideas
• Distinguishing internal components (strengths and weaknesses) over which the organisation may have an influence, from external components (opportunities and threats) over which it has none
• Ensuring a thorough approach, without avoiding issues
• Supporting a "realistic" approach, particularly when dealing with weaknesses
• Conducting and fostering debates, with a continuous flow
• Providing an analysis, as short and straightforward as possible, including the classification of factors by their relative importance

In country evaluations, the ability to speak the local language is often required, and so local support may be needed. The moderator should also demonstrate the skills and qualities necessary for the conduct of a group and the implementation of a SWOT analysis.
 

How are the4 components slescted and studied?

General rules

Classification of the component of coubtry evaluation

Strengths and weaknesses are internal elements of a country, over which it has a partial or total influence (for example, the level of the population's education and health).

Opportunities and threats are external elements imposed on the country, over which, consequently, it has no influence (for example, customs barriers or drought).
Some authors classify these components differently, and deliberately drift from the original definition. They convey a current notion of strengths and weaknesses (they may be internal or external), and a future and prospective aspect to opportunities and threats.

Methodology for the determination and study of the 4 components

The sequence, and the way to determine and study the 4 components (strengths, weaknesses, opportunities, threats), may greatly differ, depending on the methodologies required by the agencies. SWOT analysis may be organised as:

• A completely oral session, or a session including a part dedicated to each participant's written contribution, prior to the synthesis
• Brainstorming, or a very structured session depending on a precise process
• A study carried out by individuals, pairs or groups
• A study undertaken by only one group, or multiple studies conducted by different groups which are followed by a synthesis of the groups' findings constructed during a plenary session, and by the drafting of a single SWOT matrix
• A study conducted without a definite framework, or a study developed from pre-established questions, or problems and issues to which the group should pay particular attention
• Thematic studies (strengths, weaknesses, etc.) completed by a multi-thematic synthesis
• A sequenced study of the components (strengths, weaknesses, etc.), or a study putting emphasis on the components' links (strengths with weaknesses, and opportunities with threats)

Whatever the methodologies, the order of the components is not important when the methodology is adapted to the group. Thus, the moderator must be flexible, and adapt to the human, financial, time based and thematic constraints, without forgetting the objective, which is to answer the following questions:

• What is the role of the SWOT analysis in the ongoing evaluation?
• Has the goal been reached with the methodology selected?

Study of the strengths

How are strengths identified?

Strengths are positive internal factors that are controlled by the organisation, or the country, and which provide foundations for the future. They may be:

• Fields you can be proud of (a valuable educative or judicial system, civil society participating in national debates)
• Well managed fields (a fair educational level provided to the population or some of its segments, a high level of exports, well-managed public finances)
• Available and accessible resources (waters full of fish, abundant and easily exploitable minerals, fertile soils)
• Expertise recognised by other organisations or countries (reputation of a country in which labour is abundant and efficient, an attractive country)
• Geographical proximity to a partner (at the border of Europe), or to commercial networks (countries with harbour infrastructures located on important sea routes)

Two complementary tools for in-depth analysis

When the study of strengths needs to be deepened beyond the simple collection of the participants' opinion during the sessions, two tools can be used for further investigation. They are usually implemented to highlight the organisations' strategic capacities.

Resources audit

Resources audit may be implemented prior to a SWOT analysis. Usually, it focuses on physical resources (for example, natural, industrial or agricultural resources), human resources (organisation, level of education, availability, skills) and financial resources (state of the public finances, resources dependent on exports).
It is important that "unique" resources (if any) are identified. They represent a real advantage for the country (for example, a higher educational level compared with neighbouring countries').

Analysis of best practice

Comparisons within a country between what is more or less efficient may support the identification of best practice and should be included in the list of the strengths in the SWOT matrix.
Indicators are provided to facilitate comparisons:

• Between thematic levels (for example, the percentage of girls attending school, of vaccinated children)
• From a general point of view (human development indicator, Millennium Development Goals Indicators)

In programmes, internal comparisons should use indicators, such as the median cost per student who has completed primary school.

Other techniques for identifying factors

The list of components in the PESTEL analysis (Political, Environmental, Socio-cultural, Technological, Economic and Legal) may be used as a check-list, with a view to ensuring that all significant fields have been effectively studied.
Some evaluators complete the analysis by ranking strengths factors, in order to distinguish topics of high interest from less interesting ones.

Limitation of this approach

As the SWOT analysis is based on the participants' opinions, it is by nature subjective and qualitative. Sometimes, strength for one party can be a weakness for others.

Study of the weaknesses

Questions determining the weaknesses

• What do we do inadequately and what can we improve?
• What do our competitors do better than us?
• What should we avoid?
• What do we lack that we can control?

How are weaknesses identified?

In contrast to the strengths, weaknesses are negative internal elements, which are controlled by the organisation, and for which key improvements can be made.
They may be:

• Poor practices (poor management of budgets, lack of civil society's participation in public decision making)
• Fields amenable to improvements (lack of infrastructure, very low level of schooling)
• An unflattering image (tourist infrastructure reputed to be below average despite efforts to improve them)
• Specific lack of resources (brain drain or financial capital exported)
• An unfavourable geographical location or a lack of natural resources

Complementary tools for in-depth analysis

The strategy analysis tools used for in-depth study of weaknesses can also be used for the study of strengths. They highlight resources' difficulties and poor practices. They include:

• Resources audit
• Analysis of best practice
• A list of the components included in a PESTEL analysis, used as a check-list to ensure that all significant fields have been effectively studied
• Problem diagram. If included in strategy papers or programmes implemented in the country, the problem diagram should be used for the development of the weaknesses analysis component in the SWOT analyses.

Limitation of the approach

Analysis of the weaknesses, even more than for the analysis of strengths, requires the collection of several points of view, and at least one of the following:

• Strategy designers and programme managers
• Beneficiaries
• Representatives of the country, and of a foreign country (if possible)

Study of the opportunities

How are opportunities identified?

Opportunities are the external positive possibilities which can be taken advantage of in the context of contemporary strengths and weaknesses. They are often beyond the influence of a country, or at the margins (for example, the evolution of international consumers' taste concerning one of the country's commodities, the improvement of the economy in a "client" country, the increase of Internet trade).
They may be:

• Expanding economic fields in which the country can market its expertise (for example, increase in demand for manufactured products in European countries, strong demand for the type of tourism proposed by the country)
• Difficulties in a competitor country which can become opportunities to expand its share of the market
• New multilateral agreements easing the flow of goods and people
• Important priorities of certain donors supporting the development of specific sectors (for example, increase of the women's economic empowerment ratio)

A complementary tool for in-depth analysis: PESTEL analysis

The PESTEL analysis is a strategy analysis tool, used to support an in-depth study of opportunities. The acronym stands for Political, Ecological, Socio-cultural, Technological, Economic and Legal fields. It can be used as a check-list, ensuring that the SWOT analysis has comprehensively studied all significant fields.
These 6 themes are used as a guideline for the preparation of the sessions. Examples are given below for each elements:

• The political field: nature of specific international agreements, political stability in neighbour countries and trade partner countries, existing conflicts having an impact on the country
• The ecological field: nature of specific international agreements, evolution of the climate, pollution of international waters
• The socio-cultural field: nature of specific international agreements, socio-cultural differences with neighbouring countries, high level of immigration, delocalisation of the labour force
• The technological field: evolution of exchanges on the Internet, the relative importance of air freight comparing to sea freight, external technological innovations threatening local production or expertise
• The economic field: nature of specific international agreements, evolution of the commodity prices, evolution of the economy in customer or partner countries
• The legal field: nature of the international agreements and conventions

Study of the threats

How are threats identified?

Threats are difficulties, impediments, or external limitations which can prevent or impede the development of a country, or a sector (for example, the industry). Threats are often beyond the influence of a country, or at its margin (for example, consumers avoiding national products which are economically important for the country, large increases in energy prices, general decrease in the development assistance).
They may include:

• Recessive economic fields affecting vital productions for the country (tourism, specific farm productions)
• The development of fierce external competition for products (specific agricultural production, manufactured products)
• International agreements limiting the exchanges of goods or people (obstacles to employment in a neighbour country)
• Climatic change (global increase in temperature) and its consequences (rising sea level)

PESTEL analysis: an in-depth analysis tool

A PESTEL analysis may also support the in-depth analysis of threats, similar to the study of opportunities.

How can the SWOT's components be combined to develop a synthesis?

Ranking of components

The synthesis of studies is highly valuable because it enables the evaluator to connect SWOT components with others, beyond the determination of their content. The construction of a synthesis can only be efficient if the components have already been ranked, to select important matters and to omit matters of secondary importance.

Connection between components

This stage focuses on the strategies to maximise the use of information. The following chart highlights the relationship between SWOT components.

Summary chart of the 10 possibilities provided by the SWOT analysis

During this stage, the evaluator should systematically study all 10 possibilities presented in this chart, from information provided by the SWOT analysis. This task should ideally be carried out with groups during the sessions.

Debriefing of the analysis

The debriefing of the SWOT analysis is usually presented as a table of 4 cells, describing the strengths, weaknesses, opportunities and threats. The evaluator should annex a complete report to this classical presentation, including:

• The methodologies used to prepare the sessions, select the groups, and to conduct the sessions
• A study of the SWOT's limitations (for example, a group was not able to intervene because of the presence of another group)
• A study of possible opinion gaps between groups (for example, beneficiaries as opposed to managers)
• A description of SWOT's final outcomes (for example, any strategic approaches identified by the analysis)
• The report's annexes, which should comprise a list of the participants and their professional status, the findings of any intermediary stages (for example, a SWOT analysis conducted with different groups of actors, or a thematic SWOT analysis)

Completion of the analysis

The SWOT analysis is only a tool and, moreover, a subjective one. In a domain as wide as that of the strategies implemented at a country level, the evaluator should not underestimate the SWOT's limitations. It is impossible for a tool as straightforward as SWOT analysis to take account of all the actual situations, and assess all the connections between them. The evaluator should therefore remain pragmatic and use other sources of information and advice, to supplement the analysis of the situation and of the strategy.

• Examples

General references

• Exploring Corporate Strategy, Gerry Johnson and Kevan Scholes.
• "Stratégique", Gerry Johnson, Kevan Scholes et Fréderic Fréry. Edition Pearson France.
• Means Collection.

Specific references in country evaluations

• "SWOT analysis of Pension Schemes Administration in Selected African Countries", the World Bank, February 2002. [EN] 
• "SWOT analysis for the participatory research in the Pacific". Tellus Consultants. 
• "Analyse SWOT", Ex ante evaluation of the Interreg programme III France-Italy, paragraph 5, Alcotra, October 2000, p.72-87.