SWOT analysis in project management
SWOT analysis is a common used tool in project management. It was developed by Harvard economists during the 1960s. This method is very powerful for all types of projects if it is applied correctly. Indeed, it is a strategic business analysis tool that combines the study of the strengths and weaknesses of a project with the opportunities and threats of its environment, in order to help define a development strategy. They are known as internal and external factors.3,6
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. These are the four key areas to be identified and assessed in order to develop an efficient business or project. The SWOT analysis usually ends up by building a matrix 2 by 2 where each cells corresponds to an area. Other tools such as the PEST method 5 could be associated with the SWOT analysis in order to have a broader view of the assessment of threats and opportunities.
In this Wiki article, you will find information on how to use this powerful tool in project management and under what circumstances as well as an example to show how to use the SWOT analysis in an efficient way.
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The theory of SWOT Analysis
Why do we use a SWOT Analysis ?
The SWOT method is mainly used during the early stage of a project in order to analyse the situation. It combines the analyse of the current state with the analysis of the future state. Indeed, we start by identifying the strengths and weaknesses (internal point of view) and the opportunities and threats (external point of view). Then, by analyzing the matrix, we are able to get a better view of the future state of the project.
The SWOT matrixes are usually performed for different purposes in companies. Here is a list of some area of applications 1 :
- Performance analysis : To identify and to measure the influence of the internal operations and the external impacts on how the company is performing
- Situation analysis : To assess internal and external conditions affecting the company at the beginning of a project
- Cause analysis : To evaluate what tools need to be developed and what methods should be improve
- Business analysis : To identify markets opportunities and threats and find how to deal with it.
The use of the SWOT analysis is not only limited to companies as it can be used for any type of project (professional or personal). For instance, you can do a SWOT matrix for yourself to prepare for a job interview or when you are planning a road trip.
When do we use a SWOT Analysis ?
In a system-oriented problem solving project, there are several steps divided on the outcome of each phases1 :
- Situation analysis : The goal of this first step is to clearly identify the issue and to frame the project. Gathering data, identifying factors that may influence the project, analyzing the current state and predicting the future state are among the main tasks.
- Goal definition : The outcome of this phase is to clearly define objectives for the project. At the end of the first two steps, the project should be framed and the issues to solve identified.
- Searching for solutions : During this phase, the project team should elaborate potential feasible solutions by brainstorming and then conducting data-driven analysis to see if it is feasible.
- Selection : The end phase of the methodology of system-oriented problem solving consists on making a decision by elaborating a set of criteria and assessing each potential solutions.
SWOT analysis is used in the situation analysis phase to analyse the current state and to predict the future state. It is usually one of the last tool used during this phase after demarcating the system, analyzing the stakeholders and gathering data. The figure 1 shows when to apply the method in the system-oriented problem solving process.
FIGURE 1 TO PUT
Assessing the factors
The first step of SWOT analysis consists of assessing the four factors 3 : Strengths, Weaknesses, Opportunities and Threats. The first two factors are internal : they are depending only on the company. As an analogy with a personal SWOT matrix, they correspond to the qualities and defaults of the person. On the contrary, opportunities and threats are external. As examples, those external factors can be governments policies, a new concurrent rising, new business opportunities or even a worldwide pandemic such as the COVID-19 crisis.
