ESWOT: An Econometrics Approach to SWOT Analysis. Case Study to Evaluate IBM’s Performance
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Date
2009-05-30
Authors
Cheng Ping Shih
Maria Smaranda Moldovan
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Abstract
The various challenges a company meets when facing globalization emphasize more than ever the role of strategic management. Many companies conduct SWOT analysis as part of the strategic planning process, yet criticism in employing SWOT pinpoints the fact that the analysis lacks the possibility of comprehensively appraising the strategic decision-making situation. This paper sets out to take an integrative approach to SWOT analysis through the use of an econometrics model in order to quantitatively determine the importance of each of the factors to be evaluated. Therefore, this paper introduces ESWOT as a theoretical framework through the integration of econometrics and SWOT analysis, in order to measure the impact of global strategies, strategic business units and policy change strategies on IBM’s financial performance. The empirical results several important findings. Firstly, the Global Services SBU and the employees are the main strengths of the company. Secondly, the Hardware Unit and the retirement plan are the main weaknesses of the company. Thirdly, Gerstner’s policy is the main opportunity for IBM. Lastly, the study of IBM’s strategy shows that the regional variables and selling the hardware department are the main threats of the company.