SWOT Analysis in Construction Projects - Revision history

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	SWOT Analysis examines the business organization and its project from the point of view of the external and internal environment. According to Rainer Züst and Peter Troxler, SWOT Analysis Matrix gives the opportunity to evaluate the results and evaluations that are associated with from both the present and the future-related views. In a SWOT Analysis the strengths and weaknesses as well as the opportunities and threats are listed in a matrix vertically and horizontally, respectively. Strengths and weaknesses and opportunities and threats that have the same cause, could require mostly likely similar or the same actions. <ref name=RZPT> Züst, R., & Troxler, P. (2006). No more muddling through: Mastering complex projects in engineering and management. No More Muddling Through: Mastering Complex Projects in Engineering and Management (pp. 1–185). Springer Netherlands. https://doi.org/10.1007/978-1-4020-5018-3 </ref>		SWOT Analysis examines the business organization and its project from the point of view of the external and internal environment. According to Rainer Züst and Peter Troxler, SWOT Analysis Matrix gives the opportunity to evaluate the results and evaluations that are associated with from both the present and the future-related views. In a SWOT Analysis the strengths and weaknesses as well as the opportunities and threats are listed in a matrix vertically and horizontally, respectively. Strengths and weaknesses and opportunities and threats that have the same cause, could require mostly likely similar or the same actions. <ref name=RZPT> Züst, R., & Troxler, P. (2006). No more muddling through: Mastering complex projects in engineering and management. No More Muddling Through: Mastering Complex Projects in Engineering and Management (pp. 1–185). Springer Netherlands. https://doi.org/10.1007/978-1-4020-5018-3 </ref>


	As described in ISO 21500:2021, the organizational environment is affected both by internal and external factors influencing organizational activities and decision-making. An organization should consider influences internal influences regarding the governance and management of projects, programs and portfolios. <ref name=ISO> Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021).</ref> The internal environment includes internal stakeholders is affected by the structure, processes and culture of the organization and could consist of sponsors, members of the governing body, managers in functional roles, employees, project managers. The external environment of the organization affects the organization’s ability to realize benefits and could include factors related to opportunities and threats arising from economic, political, social, legal and environmental constraints, as well as expectations and requirements by external stakeholders. In a SWOT Analysis, the strengths and weaknesses are connected with the internal environment, while the opportunities and threats are connected with the external. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref>		As described in ISO 21500:2021, the organizational environment is affected both by internal and external factors influencing organizational activities and decision-making. An organization should consider influences internal influences regarding the governance and management of projects, programs and portfolios. <ref name=ISO> Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021).</ref> The internal environment includes internal stakeholders is affected by the structure, processes and culture of the organization and could consist of sponsors, members of the governing body, managers in functional roles, employees, project managers. The external environment of the organization affects the organization’s ability to realize benefits and could include factors related to opportunities and threats arising from economic, political, social, legal and environmental constraints, as well as expectations and requirements by external stakeholders. In a SWOT Analysis, the strengths and weaknesses are connected with the internal environment, while the opportunities and threats are connected with the external. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref>
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	As an example, SWOT Analysis in Azzaro construction project based on the paper ''Practical Appliction of SWOT Analysis in the Management of a Construction Project'' <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref> will be presented below. The project includes the construction of a 5,802 m2 business area, in order to continue a row of similar architecture buildings, with total investment cost US$5 million. All components were analyzed both by contractor's and investor's perspective.		As an example, SWOT Analysis in Azzaro construction project based on the paper ''Practical Appliction of SWOT Analysis in the Management of a Construction Project'' <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref> will be presented below. The project includes the construction of a 5,802 m2 business area, in order to continue a row of similar architecture buildings, with total investment cost US$5 million. All components were analyzed both by contractor's and investor's perspective.


	=== Investor's Perspective ===		=== Investor's Perspective ===

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	'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)''' ISO 21500:2021 provides guidance on project management and describes the benefits that could be gained by applying the standard itself. Furthermore, it explains how opportunities could be processed in order to achieve the desire outcome and how organizational strength could be raised through project implementation.		'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)''' ISO 21500:2021 provides guidance on project management and describes the benefits that could be gained by applying the standard itself. Furthermore, it explains how opportunities could be processed in order to achieve the desire outcome and how organizational strength could be raised through project implementation.


	'''The standard for project management. (2021). A Guide To the Project Management Body of Knowledge (pmbok® Guide) – Seventh Edition and the Standard for Project Management (english) (pp. xxvi, 67, 274 Seiten (unknown). Project Management Institute, Inc.''' The PMI Standard for Project Management describes why risk management is crucial for any organization and organizational desicions. Moreover, it develops connections between projects, programs and portfolios and associates them with ERM and organizational strategies.		'''The standard for project management. (2021). A Guide To the Project Management Body of Knowledge (pmbok® Guide) – Seventh Edition and the Standard for Project Management (english) (pp. xxvi, 67, 274 Seiten (unknown). Project Management Institute, Inc.''' The PMI Standard for Project Management describes why risk management is crucial for any organization and organizational desicions. Moreover, it develops connections between projects, programs and portfolios and associates them with ERM and organizational strategies.

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Annotated Bibliography

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	== Annotated Bibliography ==		== Annotated Bibliography ==

	'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39''' The book provides knowledge on the ways that a systematic evaluation of strengths, weaknesses, opportunities and threats could be conducted, examples and definition of problems to be solved and how possible solutions could be identified.		'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39''' The book provides knowledge on the ways that a systematic evaluation of strengths, weaknesses, opportunities and threats could be conducted, examples and definition of problems to be solved and how possible solutions could be identified. The book also presents SWOT Analysis in detail and gives valueable information on the application of it in projects and organizations.

	'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)''' ISO 21500:2021 provides guidance on project management and describes the benefits that could be gained by applying the standard itself. Furthermore, it explains how opportunities could be processed in order to achieve the desire outcome and how organizational strength could be raised through project implementation.		'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)''' ISO 21500:2021 provides guidance on project management and describes the benefits that could be gained by applying the standard itself. Furthermore, it explains how opportunities could be processed in order to achieve the desire outcome and how organizational strength could be raised through project implementation.


			'''The standard for project management. (2021). A Guide To the Project Management Body of Knowledge (pmbok® Guide) – Seventh Edition and the Standard for Project Management (english) (pp. xxvi, 67, 274 Seiten (unknown). Project Management Institute, Inc.''' The PMI Standard for Project Management describes why risk management is crucial for any organization and organizational desicions. Moreover, it develops connections between projects, programs and portfolios and associates them with ERM and organizational strategies.

	== References ==		== References ==

	<references />		<references />

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	SWOT analysis is a significant tool for strategic planning, especially useful in the stage of identifying strategies, in order to eliminate uncertainty and risks. It shall apply for situational analysis, through which it can adapt its internal structure, activities and processes to the economic environment in the selection and project management process. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref> The main factors that are taken into consideration when implementing a SWOT analysis are the internal components (strengths and weaknesses), as well as the external components (opportunities and threats). The matrix that is created can be used within an organization or for the implementation of a project as a way to identify the strategic holes related with it, during the phases of planning, contracting and construction of the project. The example that is going to be used in order to portray the application of SWOT analysis is the case of Azzaro project in Serbia, both by the investor’s and the contractor’s perspective.		SWOT analysis is a significant tool for strategic planning, especially useful in the stage of identifying strategies, in order to eliminate uncertainty and risks. It shall apply for situational analysis, through which it can adapt its internal structure, activities and processes to the economic environment in the selection and project management process. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref> The main factors that are taken into consideration when implementing a SWOT analysis are the internal components (strengths and weaknesses), as well as the external components (opportunities and threats). The matrix that is created can be used within an organization or for the implementation of a project as a way to identify the strategic holes related with it, during the phases of planning, contracting and construction of the project. The example that is going to be used in order to portray the application of SWOT analysis is the case of Azzaro project in Serbia, both by the investor’s and the contractor’s perspective.

	The following article aims to present the SWOT analysis method and framework, as part of risk management process and apply the theory into a real construction project, with emphasis in the different stakeholders’ perspective and approach of the project. Furthermore, the author’s reflections regarding the advantages and the limitations of this tool will be presented in order to highlight its crucial value in project management.		Risk is considered to be, according to PMI Standard on Project Management (2021), an unpredicted event or condition that, in case it occurs, affects (positively or negatively) one or more objectives. Positive risks are opportunities, while negative risks are threats. The practice of risk management includes planning the approach, identifying and analyzing risks, response planning and implementation, and ongoing monitoring of risks and is a very important aspect for all organizational activities. <ref name=PMI> The standard for project management. (2021). A Guide To the Project Management Body of Knowledge (pmbok® Guide) – Seventh Edition and the Standard for Project Management (english) (pp. xxvi, 67, 274 Seiten (unknown). Project Management Institute, Inc.
			</ref> The following article aims to present the SWOT analysis method and framework, as part of risk management process and apply the theory into a real construction project, with emphasis in the different stakeholders’ perspective and approach of the project. Furthermore, the author’s reflections regarding the advantages and the limitations of this tool will be presented in order to highlight its crucial value in project management.

	__TOC__		__TOC__

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	'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39''' The book provides knowledge on the ways that a systematic evaluation of strengths, weaknesses, opportunities and threats could be conducted, examples and definition of problems to be solved and how possible solutions could be identified.		'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39''' The book provides knowledge on the ways that a systematic evaluation of strengths, weaknesses, opportunities and threats could be conducted, examples and definition of problems to be solved and how possible solutions could be identified.

	'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)'''		'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)''' ISO 21500:2021 provides guidance on project management and describes the benefits that could be gained by applying the standard itself. Furthermore, it explains how opportunities could be processed in order to achieve the desire outcome and how organizational strength could be raised through project implementation.

	== References ==		== References ==

	<references />		<references />

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Annotated Bibliography

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	== Annotated Bibliography ==		== Annotated Bibliography ==

	'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39'''		'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39''' The book provides knowledge on the ways that a systematic evaluation of strengths, weaknesses, opportunities and threats could be conducted, examples and definition of problems to be solved and how possible solutions could be identified.

	'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)'''		'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)'''

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Limitations

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	Despite the fact that SWOT Analysis is a tool that allows companies to identify and keep risk of their business decisions under control, redefine their goals and strategies and recognize their strengths over the competitors, it might not enough for specific types of projects. For instance, sometimes the entries in a SWOT Matrix might not be quite valid and accurate, because of the dynamic and structural changes asociated with different levels of a system. Furthermore, even though many factors can be considered, quantity does not always guarantee quality of their content, which could easily be subjective or prone to bias. In that case, it would be more beneficial if it is combined with other tools in order to raise the validity of the information it provides, lead to the most ideal decisions and eliminate uncertainty as much as possible. In an attempt to avoid poor formulation of SWOT Matrix, it would be more advantageous to be structured and used by an experienced person.		Despite the fact that SWOT Analysis is a tool that allows companies to identify and keep risk of their business decisions under control, redefine their goals and strategies and recognize their strengths over the competitors, it might not enough for specific types of projects. For instance, sometimes the entries in a SWOT Matrix might not be quite valid and accurate, because of the dynamic and structural changes asociated with different levels of a system. Furthermore, even though many factors can be considered, quantity does not always guarantee quality of their content, which could easily be subjective or prone to bias. In that case, it would be more beneficial if it is combined with other tools in order to raise the validity of the information it provides, lead to the most ideal decisions and eliminate uncertainty as much as possible. In an attempt to avoid poor formulation of SWOT Matrix, it would be more advantageous to be structured and used by an experienced person.

	Construction projects include a significantly high level of uncertainty compared to others, because of the unique traits that each one consists of. Since private financiers are involved in construction projects, it is very important to keep them under a certain budget. Thus, SWOT Analysis should be conducted by both contractors and investors, so that both sides are informed about the risks of their collaboration in advance. The investor needs to distinguish between good and bad quality and honesty, which can be achieved by demanding transparent risk prices in estimates or by demanding that estimates include plans for handling the risk. This way, the differences between honest and dishonest estimates can be seen. In practice, bidders with experience in handling risk can show goodwill toward bearing the risk and give lower prices than the competition, which increases their strength in the marketplace. <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref> In general, SWOT Analysis ~~should~~ be a part of risk and uncertainty management strategies, but should be structured by experienced people in combination with other tools in order to be efficient, especially in large scale construction projects.		Construction projects include a significantly high level of uncertainty compared to others, because of the unique traits that each one consists of. Since private financiers are involved in construction projects, it is very important to keep them under a certain budget. Thus, SWOT Analysis should be conducted by both contractors and investors, so that both sides are informed about the risks of their collaboration in advance. The investor needs to distinguish between good and bad quality and honesty, which can be achieved by demanding transparent risk prices in estimates or by demanding that estimates include plans for handling the risk. This way, the differences between honest and dishonest estimates can be seen. In practice, bidders with experience in handling risk can show goodwill toward bearing the risk and give lower prices than the competition, which increases their strength in the marketplace. <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref> In general, SWOT Analysis could be a useful part of risk and uncertainty management strategies, but should be structured by experienced people in combination with other tools in order to be efficient, especially in large scale construction projects.

	== Annotated Bibliography ==		== Annotated Bibliography ==

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Limitations

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	Despite the fact that SWOT Analysis is a tool that allows companies to identify and keep risk of their business decisions under control, redefine their goals and strategies and recognize their strengths over the competitors, it might not enough for specific types of projects. For instance, sometimes the entries in a SWOT Matrix might not be quite valid and accurate, because of the dynamic and structural changes asociated with different levels of a system. Furthermore, even though many factors can be considered, quantity does not always guarantee quality of their content, which could easily be subjective or prone to bias. In that case, it would be more beneficial if it is combined with other tools in order to raise the validity of the information it provides, lead to the most ideal decisions and eliminate uncertainty as much as possible. In an attempt to avoid poor formulation of SWOT Matrix, it would be more advantageous to be structured and used by an experienced person.		Despite the fact that SWOT Analysis is a tool that allows companies to identify and keep risk of their business decisions under control, redefine their goals and strategies and recognize their strengths over the competitors, it might not enough for specific types of projects. For instance, sometimes the entries in a SWOT Matrix might not be quite valid and accurate, because of the dynamic and structural changes asociated with different levels of a system. Furthermore, even though many factors can be considered, quantity does not always guarantee quality of their content, which could easily be subjective or prone to bias. In that case, it would be more beneficial if it is combined with other tools in order to raise the validity of the information it provides, lead to the most ideal decisions and eliminate uncertainty as much as possible. In an attempt to avoid poor formulation of SWOT Matrix, it would be more advantageous to be structured and used by an experienced person.

	Construction projects include a significantly high level of uncertainty compared to others, because of the unique traits that each one consists of. Since private financiers are involved in construction projects, it is very important to keep them under a certain budget. Thus, SWOT Analysis should be conducted by both contractors and investors, so that both sides are informed about the risks of their collaboration in advance. The investor needs to distinguish between good and bad quality and honesty, which can be achieved by demanding transparent risk prices in estimates or by demanding that estimates include plans for handling the risk. This way, the differences between honest and dishonest estimates can be seen. In practice, bidders with experience in handling risk can show goodwill toward bearing the risk and give lower prices than the competition, which increases their strength in the marketplace. <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref>		Construction projects include a significantly high level of uncertainty compared to others, because of the unique traits that each one consists of. Since private financiers are involved in construction projects, it is very important to keep them under a certain budget. Thus, SWOT Analysis should be conducted by both contractors and investors, so that both sides are informed about the risks of their collaboration in advance. The investor needs to distinguish between good and bad quality and honesty, which can be achieved by demanding transparent risk prices in estimates or by demanding that estimates include plans for handling the risk. This way, the differences between honest and dishonest estimates can be seen. In practice, bidders with experience in handling risk can show goodwill toward bearing the risk and give lower prices than the competition, which increases their strength in the marketplace. <ref name=LLL> Milosevic, Igor. (2010). Practical Application of SWOT Analysis in the Management of a Construction Project. Leadership and Management in Engineering. 10. 10.1061/(ASCE)LM.1943-5630.0000041. </ref> In general, SWOT Analysis should be a part of risk and uncertainty management strategies, but should be structured by experienced people in combination with other tools in order to be efficient, especially in large scale construction projects.

	== Annotated Bibliography ==		== Annotated Bibliography ==

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Annotated Bibliography

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	'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39'''		'''Rainer Zuest and Peter Troxler: No More Muddling Through (2006), Springer, pp. 35-39'''

	'''ISO 21500:2021'''		'''Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021)'''

	== References ==		== References ==

	<references />		<references />

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The Use in Project, Program and Portfolio Management

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	As described in ISO 21500:2021, the organizational environment is affected both by internal and external factors influencing organizational activities and decision-making. An organization should consider influences internal influences regarding the governance and management of projects, programs and portfolios. <ref name=ISO> Project, programme and portfolio management – Context and concepts. (2021).</ref> The internal environment includes internal stakeholders is affected by the structure, processes and culture of the organization and could consist of sponsors, members of the governing body, managers in functional roles, employees, project managers. The external environment of the organization affects the organization’s ability to realize benefits and could include factors related to opportunities and threats arising from economic, political, social, legal and environmental constraints, as well as expectations and requirements by external stakeholders. In a SWOT Analysis, the strengths and weaknesses are connected with the internal environment, while the opportunities and threats are connected with the external. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref>		As described in ISO 21500:2021, the organizational environment is affected both by internal and external factors influencing organizational activities and decision-making. An organization should consider influences internal influences regarding the governance and management of projects, programs and portfolios. <ref name=ISO> Project, programme and portfolio management – Context and concepts: DS/ISO 21500:2021 (2021).</ref> The internal environment includes internal stakeholders is affected by the structure, processes and culture of the organization and could consist of sponsors, members of the governing body, managers in functional roles, employees, project managers. The external environment of the organization affects the organization’s ability to realize benefits and could include factors related to opportunities and threats arising from economic, political, social, legal and environmental constraints, as well as expectations and requirements by external stakeholders. In a SWOT Analysis, the strengths and weaknesses are connected with the internal environment, while the opportunities and threats are connected with the external. <ref name=HBOIP> Galabova, B. (2018), ''Application of the SWOT-analysis in Project Management in Business Organizations. Science & Research'', 2(1), 21–26.</ref>

	=== SWOT Analysis Components ===		=== SWOT Analysis Components ===