SWOT analysis

SWOT analysis is a strategic planning technique that examines the Strengths, Weaknesses, Opportunities and Threats related to an organisation or project. In project management it is used while developing the charter, project selection and risk identification, to understand the internal and external position of the project.

• Internal factors: strengths and weaknesses (within the organisation or project).
• External factors: opportunities and threats (outside the organisation).

            Helpful          Harmful
Internal | Strengths     |  Weaknesses   |
External | Opportunities |  Threats      |

Components

Steps

1. Define the objective (project or organisation).
2. List internal strengths and weaknesses.
3. List external opportunities and threats.
4. Compare and match: use strengths to take opportunities, reduce weaknesses, counter threats.
5. Develop strategies and decisions.

Uses in project management

• Evaluate whether to take up a proposed project (project selection).
• Identify risks (threats and weaknesses) and opportunities.
• Support planning of strategy and resources.
• Provide input to the business case and charter.

Advantages and limits

• Simple and cheap; encourages team discussion.
• But it is subjective, produces lists without priority, and may oversimplify.

Example: A company evaluating a mobile wallet project notes a strength (existing payment expertise), weakness (limited marketing), opportunity (rising smartphone use) and threat (banks' own apps).