How to do a SWOT Analysis for Project Management (+Example)
When working on a project either as a Project Manager or Business Analyst, you want to know your work’s context and contribution. A SWOT analysis is a strategic decision-making and planning technique widely used to understand the business environment, and we can use the same method when considering a project.
The project is at the centre of the SWOT analysis in project management. It is completed at the Initiation and Planning stages and maintained over the lifetime of the project. You would consider and address external opportunities and threats as well as internal strengths and weaknesses.
There is a lot to SWOT analysis. We will cover four additional strategic analysis techniques that feed into SWOT analysis to get a comprehensive picture. At the end of it, you will have a very clear understanding of using SWOT for project management and tools to make it useful for your team.
How To Start SWOT Analysis In Project Management?
Typically, you would use it in projects’ initial stages or considering individual departments. We can use SWOT to improve project planning, identify and manage risks and issues, and increase project success probability. Plus, we can also use SWOT in the later stages of the project, which we will discuss. To start with, the projects’ teams need to answer eight questions in the table below:
|Question Type||Strengths||Weaknesses (Project issues)||Opportunities||Threats (Project risks)|
|Main Questions||★ What are our strengths?||★ What are our weaknesses?||★ What are our opportunities?||★ What are our threats?|
|Main Questions||★ How can we use our strengths?||★ How can we address each weakness?||★ How can we exploit each opportunity?||★ How can we manage each threat?|
|Examples||The project has a detail project plan||Young team with little experience||Increased demand for products project is creating.||Increase new entries to the market, where project create the product|
|Examples||The project is addressing business objectives||Unclear goals||Competition is low for the product created.||Increase in industry regulation increase time|
|Examples||Great Internal resources such as Know-how, Financial, Physical||Resouces limitations like human||Technology decreasing production costs||Low switching cost for buyers|
|Examples||readily intangible resources access like Reputation, Patents||Lack of Stakeholder engagement||The project can utilise the firm’s excellent relationship with suppliers||Increase in the cost of inputs|
The Project Manager can arrange to answer questions in an official setting. Thus, the project would organise a workshop with all relevant stakeholders; go through each part of SWOT analysis; get a comprehensive picture of potentially strong and week points for the project and really organisation. Or you can do less official version and have a meeting only with your project team.
Finally, the team would collate all the answers into a SWOT document or paper and maintain them throughout the project duration. Several strategic tools can help with answering eight given questions. Tools are PESTLE, Porter’s Five Forces, MOST Analysis and Business Resources Audit, which we will explore in the post. I will also provide some helpful tips, discuss the purpose of a SWOT analysis for project management, and of course, go through each element of SWOT in detail:
However, to really understand why we are doing a SWOT analysis, we need to understand the importance and the purpose of strategic analysis in an organisation for project management.
Why Is A Strategic Analysis Important in Project Management?
As project managers and business analysts are working on projects, i.e. change, they are concerned with understanding how businesses operate to make the right improvements. The change can relate to multiple elements in an organisation, like IT, people, processes & procedures, all affected by the whole organisation’s strategy.
When we start a project, typically, you have an idea of what you will be trying to solve. However, when the project team begins to investigate all existing processes, people and interrelationships, they may find some more concerning issues that need to be added to the project’s scope.
The reality is, most project managers or business analysts will not get involved in setting fundamental strategies for businesses. An organisation is more likely to do this with the executive team, external consultants or specialists. Yet, it may be that some senior business analysts could help to set out details for the strategy.
Nevertheless, the understanding of business is still essential even if you do not directly contribute. The project team needs to know a broader business strategy context to appreciate how project goals and objectives contribute to business success. You can use strategic business tools as guiding principles to understand the critical objectives.
The difference between applying strategy tools at the company level vs project level:
- When thinking about the whole business strategy, you will look into the external factors like the outside world and business domain (e.g. industry, market). Only then you will concentrate internally on the organisation itself.
- When you are looking into a project or department, you will still have external factors like the outside world. But now, you should be treating your organisation as your external environment as well.
Thus, when looking into a project to device a strategy, we go one level down from an organisation and think about our project or department as one unit operating in a company.
Let’s learn more about what SWOT actually stands for.
What Is SWOT Analysis In Project Management?
|Present state, internal factors that support your objective||Present State, internal factors that hurt your objective|
|Mostly future state, external factors that support your objective||Mostly future state, external factors that hurt your objective|
We have already discussed that a SWOT analysis is a strategic tool used by typically larger organisations to understand various vital strategic aspects. In essence, it should show where a business is going strong, what opportunities are available and where they need to improve today or in the future.
Project Managers (i.e. PM) can also use SWOT analyses to understand the business context and the specific project. Thus, if you look to a project as a unit and PM as a CEO, the study would indicate strong and week points for a project.
So, what does an acronym SWOT stands for? Plus, how to apply it in project management?
What Are Strengths in SWOT Analysis for Project Management?
Strengths are known as a present state (i.e. today), internal factor, which we control, which helps a project or whole organisation succeed. In projects, such factors would be those that allow you to have a smoother project, for example, precise business requirements, excellent project plan, an engaged sponsor, experienced team and available time from subject-matter experts (i.e. SMEs).
What Are Weaknesses in SWOT Analysis for Project Management?
Of course, we have the opposite factor to strengths, which is weaknesses. These are present state, internal factors that make it challenging to be successful, such as a new, inexperienced team that never works together. Thus, the team still has to go through Forming, Storming, Norming, Performing stages. You could also add here lower visibility on project progress, unclear task ownership, a lack of allocated resources, like budgets or SMEs time, to name a few. These are also known as issues, and managing risks (threats) and issues (weaknesses) is a large part of project management.
What Are Opportunities in SWOT Analysis for Project Management?
Well, if we have internal factors, then we have external factors as well. Opportunities are one of them. These can be either current or future factors. One common opportunity to consider is vendor discounts. Often when you go through the procurement process, vendors could offer discounts in return for your future business. To give some other examples, it could be that suddenly there is an availability of additional resources from a separate project or your stakeholders decided to decrease scope.
What Are Threats in SWOT Analysis for Project Management?
Finally, we have threats, which are external factors that could prevent the project from finishing on time or make a project fail altogether. You may have threats currently or in the future. As mentioned before, in the project, we call them risks. Let’s have a look at a few examples. Say, there could be a vendor you have chosen, but there is a risk that it may not meet your business security criteria. There could be potentially significant changes in the organisation’s structure, and SMEs may not have time to contribute to your project. The scope or cost may increase due to upcoming changes in the market.
What Is Risk & Issues Management?
All project should identify risks & issues and then track them in the risks & issues log. The risks & issues log will be likely growing throughout the project lifecycle. Note:
- Risks: are factors that may negatively affect the project plan and parameters.
- Issues: are events that have already happened and are already negatively affecting the project.
Managing risks is to understand potential impacts and probability and then reduce risks by either accepting, mitigating or avoiding them. The purpose of addressing issues is to understand their effects and priority and then mitigate them by finding the solution.
What Is The Purpose of a SWOT Analysis?
SWOT analysis is an effective way to brainstorm an plan for a project. It helps to consider factors that are currently or in the future, enabling us to succeed, i.e. strengths and opportunities, or those that may prevent us from succeeding now or in the future, i.e. weaknesses and threats. Plus, You can apply SWOT analysis on the whole project or just on a particular area, like onboarding new software or project team (hopefully with the team involved).
Suppose you have identified areas that could either help a project or is a potential problem, like risks & existing issues. In that case, the awareness allows you to utilise, defend or address factors by creating project management strategies and plan.
However, you may want to apply SWOT analysis later in the project as well. In particular, if there are some difficulties. If our original vendor had to be replaced with a new supplier, you might want to understand if it is the best choice in the current business or project environment. Maybe there is an impact on existing staff as they do not have skills and cannot use a new vendor’s software. You can use the SWOT analysis to understand the impact.
Playing out a SWOT analysis has one additional benefit, it encourages creativity, and the team or working group may develop new creative ways to utilise strengths or opportunities. Maybe there is somebody in your team that has a particular strength, which was not considered yet. So, the discussion may reveal it.
The ultimate goal is to exploit strengths, address weaknesses, seize opportunities and defend against threats.
How Are SWOT Analysis Factors Linked?
You can also use positive factor to support and mitigate negative ones. Please, see the “TOWS Matrix” table below.
|Opportunity-Strength (OS) Strategies|
Use the strengths to take advantage of opportunities.
|Threat-Strength (TS) Strategies|
Use strengths to avoid threats.
|Opportunity-Weakness (OW) Strategies|
Overcome weaknesses by taking advantage of opportunities
|Threat-Weakness (TW) Strategies|
Minimize weaknesses and avoid threats
What Can Strategic Tools Be Used in SWOT Analysis?
|MOST analysis & Resource Audit||MOST analysis & Resource Audit|
|PESTLE & Porter’s Five-Forces||PESTLE & Porter’s Five-Forces|
In an informal setting, like a team meeting, you may go through each factor one by one and write what comes to mind. However, there is a risk that your team may miss some essential elements, particularly if the group did not give enough detail consideration. Therefore, when you are contemplating a more systematic approach, you might want to use other strategic tools to help you out and allow you to consider all bases. Good news! I have already covered all of them independently with examples in my previous posts, which you can access. Here, we will look into each at a high-level and understand where they fit in a SWOT analysis.
What Can Strategic Tools Be Used For External Factors In SWOT Analysis?
For opportunities and threats as they are external factors, we can use:
- PESTLE: looks into political, economic, socio-cultural, technological, legal and environmental factors outside of the organisation or project.
- Porter’s Five-Forces: looks into competition in the industry/sector threats of new entrants, bargaining power of buyers, threats of substitutes for both products and services and bargaining power of suppliers. These might be slightly more difficult to apply to the project, but they will filter down to the project if some factors affect the organisation. Remember, the project operates in the organisation’s environment.
What Can Strategic Tools Be Used For Internal Factors In SWOT Analysis?
For strengths and weaknesses, as they are internal factors, we can use:
- MOST analysis: looks into the mission (a.k.a. goal), objectives, strategy and tactics of the organisation or project
- Resource Audit or Business Resources: looks into resources that a company or project has and can utilise. The primary resources are physical, human, know-how, reputation and financial.
Check out my posts to get a comprehensive understanding of each method and how it helps in business and project analysis. I am continuously using the Two Wheels case study example in each post to make it more interesting. These tools will guide you through SWOT analysis almost effortlessly as you will not need to think about some abstract concepts but will have an exact checklist to go through. I will illustrate how it works in my business case example later in the blog.
What Are Tips For A SWOT Analysis in Project Management?
As with any great output, you need to get good inputs as well. Thus, if you would like to have excellent quality SWOT analysis results, which can be used for decision making, you need to make sure that the approach and data you put in is well-considered and high quality. Hopefully, these six tips below will allow you to achieve excellent results:
- Stakeholder: if you are doing an official SWOT analysis, make sure you have all crucial stakeholders, like a sponsor, team, SMEs, senior management, in the meeting. If you like to learn more about identifying key stakeholders, check out my post on stakeholder management.
- Workshop: you need to discuss, so sending emails around with questions may not cut it. You need a meeting with all key stakeholders.
- Prioritisation: If you compiled a list under each group in a SWOT analysis, you need to analyse all involved’s collected wisdom. It is unlikely that all strength, weaknesses, opportunities and threats are created equal. Thus, it would be best if you prioritised what is most relevant for a given project.
- Share SWOT Analysis: There are many tools to share finished pieces of work, like one drive, google drive or MS teams. You want to distribute the completed and prioritised analysis because stakeholders may not remember what was considered a month ago. If there are any stakeholders’ concerns, you can point them out to the right document share document.
- Actions: Also, as you have identified various elements in a SWOT analysis, you cannot ignore them, and you need to take action as a project manager. You will need to advise everyone in the shared document how the project will exploit strengths, address weaknesses (i.e. issues), seize opportunities and defend against threats (i.e. risks).
- Maintenance: the project is a dynamic endeavour, and although you plan it, things may not always go by the plan. Thus, you may need to update the SWOT analysis to be continuously aware of existing strengths, weaknesses, opportunities and threats.
What Are the Advantages & Disadvantages of SWOT in Project Management?
I have added a few advantages and disadvantages of using SWOT analysis below:
Advantages of SWOT Analysis
- Relatively cheap and easy to do. It only costs time to complete.
- Encourages creativity and helps take advantage of an organisation’s and project’s strengths, and defends against threats.
- Allow proactive preparation for multiple eventualities.
Disadvantages of SWOT Analysis
- If not updated regularly or not used in the later stages of the project, it may be a waste of time.
- If you did not do prioritisation, you might be spending too much time addressing wrong threats or weaknesses or exploring low-value opportunities and strengths.
Example Case Study “Two-Wheels” For SWOT Analysis In Project Management?
Bicycle manufacture with original name Two Wheels is a medium-sized business based in the EU. There are around 50 staff members, including engineers, administration and sales staff. It is leading in recreational and city bicycles in the central EU. But they see electric bikes (e-bikes) gaining popularity and would like to keep with the trend. The aim is to build two prototypes in the next two years, which will cost 100K, and have a 65% automated robotics line to assemble these new bicycles in the future, which will require an additional 1M. The company only has 450K in the bank.
Worth to note that the business has a loyal customer base as it was operating multiple years in the past. At the moment, customers particularly like the design and durability of conventional bikes produced by the company.
The company has two main objectives below. However, we know that there is some misalignment between Objectives and Strategy as the company started joining the partnership with one US manufacturer to produce bicycles in the US.
- The company aims to take 25% of the city and recreational bicycle market in the EU by 2025.
- The company aims to introduce two versions of the electric bike in the city and recreational markets in the EU by 2022 to attract those who are not keen cyclists.
The business has established a plan to address the increasing demand for electric bicycles. The project is at a planning stage. The project aims to build several prototypes and test them in the market.
What Are Outside Factors In Case Study?
- The EU regulation dictates that all drivers of e-bikes need to wear a helmet.
- Also, due to COVID-19, a lot of countries encouraging people to cycle to work.
- The company also has a strong relationship with existing suppliers, who can offer parts to e-bikes. All of the suppliers have five-year, fixed-price contracts with the company.
- In all countries, the legal environment will dictate that the company will be responsible if a cycling accident happens due to faulty parts.
- The popularity of e-scooters is increasing as well in most of the big cities in the EU. Most of the distances can be covered with e-scooters in the city.
Introduction To Two Wheels SWOT Analysis
Based on the short case study above, I will complete a SWOT analysis for a Two Wheels company’s project and identify strengths, weaknesses, opportunities and threats. Plus, I will utilise each strategic tool PESTLE, Porter’s Five Forces, MOST analysis and Resouce Audit to provide multiple examples of each method.
What Are Strengths In A Case Study Two Wheels?
In strengths and weaknesses, we are using the MOST analysis and Business Resource Audit.
- MOST Analysis: The business has well defined clear objectives, and the project can fully align its goals with the firm.
- Resource Audit: (Human) Companies engineers are experts in bicycle manufacturing, which will help with project budget as some internal resources can be used.
- Resource Audit: (Reputation) Great brand helps to maintain a loyal customers base. Therefore, it will be a more comfortable and smoother process for the project team when it comes to testing or getting customer opinion.
What Are Weaknesses In A Case Study Two Wheels?
- MOST Analysis: Although the objectives are clear, the strategy is not fully aligned with the company’s goals, which means the firm is not reaching goals as fast as it could. Some SMEs are preoccupied with US expansion in the business and cannot give time to the project.
- Resource Audit: (Financial) Company is starting the project without covering the full project budget immediately. The project will have to monitor the situation and try to save where possible. But ultimately may need to put production plans on hold.
What Are Opportunities In A Case Study Two Wheels?
In opportunities and threats, we are using the PESTLE analysis and Porter’s Five Forces.
- PESTLE: (Political) as people are encouraged to cycle more, the demand for an e-bike is likely to increase shortly. The project may use this opportunity to market a new product early to get pre-orders and cover the planned budgets gap.
- Porter’s Five Forces: (Bargaining power of suppliers) Company has a great position with existing suppliers. The project can easily agree to get a great price for parts to complete two prototypes from companies suppliers.
What Are Threats In A Case Study Two Wheels?
- PESTLE: If bicycle parts are low quality and a cycling accident occurs due to the faulty part, the company will need to cover all damages. The project will need to spend extra time evaluating parts’ quality and health and safety of the product to address the risk.
- Porter’s Five Forces: e-scooters may take a large portion of the e-travel market in the city. The project will need to make sure that it includes additional features in prototypes. Hence, differentiate product enough for customers to buy Two Wheels e-bike—perhaps increasing distance to 100 miles / 160 km on a single charge.
What Are Results Of SWOT Analysis In Business Case?
|1. Well defined clear objectives|
2. Companies engineers are experts in the field of bicycle manufacturing
3. Great brand
|1. Strategy is not fully aligned with the company’s objectives|
2. Not able to cover the full project budget
|1. People are encouraged to cycle more|
2. Company has a great position with existing suppliers
|1. Due to the faulty part, the company may need to cover all damages|
2. E-scooters may take a large portion of the e-travel market in the city
SWOT Analysis for Project Management Conclusion
A SWOT analysis is a powerful tool and, used wisely, provides a business and project manager with an invaluable understanding of project and organisation challenges. It will help to recognise how the project will utilise the available environment to achieve business objectives. The project manager can use the tool to ensure that the project plan is in-line with a business context.
Remember, it is much easier to do a SWOT analysis in the group setting and utilising other strategic tools as they provide an excellent checklist to follow. SWOT analysis and the resulting document should be continuously updated to maintain relevance to the project and organisation.
Now, are you going to use SWOT analysis for your next project? Do you think it will help you have a better overview of the project environment and related influences?
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