Application of Combined SWOT and AHP: A Case Study for a - PowerPoint PPT Presentation

Paper Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm Authors: Ali Gorener, Kerem Toker, Korkmaz, Ulucay Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 1 / 15

Contents Contents AHP- Analytic Hierarchy Process Applying AHP in SWOT analysis ( Strengths, Weaknesses, Opportunities and Threats Analysis ) Aim of this case sudy: Analysing SWOT subfactors of a manufacturing firm in Turkey Ranking the factors and subfactors Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 2 / 15

HIERARCHICAL STRUCTURE MODEL 1 GOAL: Ranking Factors and subfactors . . . Factor 1 Factor 2 Factor 3 Subfactor 1 Subfactor 1 Subfactor 1 Subfactor 2 Subfactor 2 Subfactor 2 . . . . . . . . . Subfactor k Subfactor m Subfactor n Prioritizing factors Prioritizing subfactors locally or globally Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 3 / 15

HIERARCHICAL STRUCTURE MODEL 2 (proposed 5 criteria and 3 alternatives) GOAL: Ranking Alternatives Criterion 1 Criterion 2 Criterion 3 Criterion 4 Criterion 5 Alternative 1 Alternative 2 Alternative 3 Prioritizing criteria Prioritizing alternatives based on each criterion Ordering the preferences of alternatives Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 4 / 15

HIERARCHICAL STRUCTURE Model 2 Table of Weights Decisive Criterion C 1 C 2 C 3 C 4 C 5 Alternatives w 1 w 2 w 3 w 4 w 5 Weight A 1 a 11 a 12 a 13 a 14 a 15 p 1 A 2 a 21 a 22 a 23 a 24 a 25 p 2 A 3 a 31 a 32 a 33 a 34 a 35 p 3 Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 5 / 15

Saaty Scale Pairwise Comparison Scale- Saaty Scale Importance Explanation 1 Two criteria contribute equally to the objective 3 Experience and judgment slightly favor one over another 5 Experience and judgment strongly favor one over another 7 Criterion is strongly favored and its dominance is demonstrated in practice 9 Importance of one over another affirmed on the highest possible order 2,4,6,8 Used to represent compromise between the priorities listed above Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 6 / 15

Decision Matrix Pairwise Comparison Matrix   a 11 a 12 . . . a 1 n . . . a 21 a 22 a 2 n     A= .   . .   a n 1 a n 2 . . . a nn a ij : the importance of criterion A i compared to criterion A j in Saaty Scale a ij = 1 / a ji or reciprocal Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 7 / 15

Decision Matrix Theoretical Weight Quotient Matrix of Criteria A 1 , . . . , A n A 1 A 2 . . . A n       A 1 w 1 / w 1 w 1 / w 2 . . . w 1 / w n w 1 w 1 A 2 w 2 / w 1 w 2 / w 2 . . . w 2 / w n w 2 w 2       = n       . . . . . . . . . . . .       w n / w 1 w n / w 2 . . . w n / w n A n w n w n � �� � � �� � � �� � w w W w i is the theoretical/absolute weight of criterion A i in group (A 1 , A 2 , . . . , A n ) Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 8 / 15

Decision Matrix Theoretical matrix W and Pairwise comparison matrix A Matrix W is reciprocal and consistent, i.e. a ij = 1 / a ji , a ij a jk = a ik while matrix A may not be consistent W has rank 1 and its max eigenvalue equals n ( λ max = n ) The largest eigenvalue of A is greater or equal to n Consistency Index (CI) of A: CI = λ max − n n − 1 λ max is A’s largest eigenvalue Consistency Ratio (CR) of A: CR = CI RI RI is the Random Index Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 9 / 15

Decision Matrix Calculating weights of criteria Row Geometric Mean Prioritization Method � n � a ij n j = n w i = � n n � � a ij n i = 1 j = n Normalizing sums over rows with a large power A k e w = e T A k e , e = ( 1 , 1 , . . . , 1 ) Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 10 / 15

SWOT Analysis Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 11 / 15

SWOT Analysis Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 12 / 15

SWOT Analysis Environment Scan Internal Analysis External Analysis Strengths Opportunities Weaknesses Threats W1 T1 S1 O1 W2 T2 S2 O2 W3 T3 S3 O3 W4 T4 S4 W5 T5 S5 W6 T6 W7 T7 Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 13 / 15

Overall Priority Scores of SWOT Factors O VERALL P RIORITY S CORES OF SWOT F ACTORS Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 14 / 15

Overall Priority Scores of SWOT Factors REFERENCES [1] Ali Gorener, Kerem Toker, Korkmaz, Ulucay, Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm, Social and Behavioral Sciences 58 (2012) 1525-1534. [2] Thomas L. Saaty, How to make a decision: The Analytic Hierarchy Process, European Journal of Operational Research 48 (1990) 9-26. Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 15 / 15