Topics on the PMP: SWOT Analysis

There’s plenty of tough topics on the PMP exam, so let’s take a look at something easy. If you have heard of or used SWOT analysis, you are probably all set for the PMP exam. If you don’t have experience with SWOT analyses, don’t sweat it. I won’t say this about many PMP topics, but this one is genuinely easy!

pmp swot analysis

What is a SWOT Analysis?

A SWOT analysis is a thorough review of of the internal and external factors that impact a company. SWOT is an acronym is for:

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

The PMBOK Guide defines a SWOT Analysis as an “analysis of strengths, weaknesses, opportunities, and threats of an organization, project, or option” (564).

Strengths and weaknesses relate to your particular company, i.e. the internal factors that positively or negatively affect your positioning. Opportunities and threats relate to the industry and environment, i.e. the external factors that impact your company.

Specifically related to your PMP exam, the SWOT analysis appears in the Identify Risks process in the Risk Management chapter, as a tool & technique. Remember this, because this is probably the most important part for your exam — when to actually do the SWOT!

Your inputs to the Identify Risks process are listed on page 312 of the PMBOK guide. A SWOT Analysis is one of the seven tools and techniques available to analyze these inputs, and there’s only one output for the process: the risk register.

SWOT Analysis in Context

Let’s say that you are the project manager of a project to open a new coffee shop. You currently operate one coffee shop, but you have the opportunity to lease a new shop in the town next door. You have just finished your risk management plan in the Plan Risk Management process, and you’ve gathered all of the inputs for the Identify Risks process.

Your risk management plan says to use a SWOT Analysis as one of the tools to help identify risks. Here’s what you come up with at first:

  • Strengths – Sales are strong, and you do not have to borrow for start-up costs.
  • Weakness – You have never opened a new store.
  • Opportunity – The new location is right along the morning commute, so there is potential to serve many commuters.
  • Threat – Starbucks operates in this town. (But you’re going to stick it to the man!)

Now you can use your SWOT Analysis to inform your creation of the risk register. Well done identifying risk on your project!

How will you remember the importance of a SWOT Analysis in the context of the Identify Risks process? Share in the comments.

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