SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats for Risk Identification
PMBOK v8 Definition
SWOT analysis is the analysis of strengths, weaknesses, opportunities, and threats of an organization, project, or option. For risk identification, it is used to increase the breadth of identified risks by including internally generated risks. The technique starts with the identification of strengths and weaknesses of the organization, focusing on either the project, organization, or the business area in general.
Why It Matters for the Exam
SWOT analysis appears frequently in PMI exam questions on risk identification (Process Group: Planning, Knowledge Area: Project Risk Management). You will see it tested in situational questions asking which tool to use to identify both internal and external risks, and in questions about how to systematically expand the range of risks considered for a project.
Key Points to Remember (for the exam)
- Main Purpose: Increase the breadth of identified risks by including internally generated risks
- Internal Factors: Strengths (positive internal) and Weaknesses (negative internal)
- External Factors: Opportunities (positive external) and Threats (negative external)
- Key Analytical Questions:
- Opportunities that may arise from strengths
- Threats resulting from weaknesses
- Degree to which organizational strengths may offset threats
- Whether weaknesses might hinder opportunities
- Application Scope: Can focus on the project, organization, or business area in general
- Common Confusion: SWOT is a risk identification tool, NOT a risk response planning tool
- Exam Tip: SWOT helps identify both positive risks (opportunities) and negative risks (threats)
Typical PMI Exam Example
A project manager is identifying risks for a new product development project. The organization has strong R&D capabilities but limited marketing experience. Using SWOT analysis, the project manager identifies opportunities from R&D strengths and threats from marketing weaknesses. The analysis also examines whether R&D strengths can offset marketing threats.
PMI Exam Traps
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Trap: Confusing SWOT analysis with root cause analysis Reality: SWOT identifies risks from organizational strengths/weaknesses; root cause analysis finds underlying causes of identified risks
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Trap: Thinking SWOT only identifies threats Reality: SWOT identifies both opportunities (from strengths) and threats (from weaknesses)
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Trap: Believing SWOT is a quantitative risk analysis tool Reality: SWOT is a qualitative risk identification technique used in the Identify Risks process
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Trap: Assuming SWOT only applies to the organization level Reality: SWOT can focus on the project, organization, or business area in general
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Risk Identification | Process where used | SWOT is a tool & technique in Identify Risks process |
| Risk Breakdown Structure (RBS) | Complementary tool | SWOT feeds into RBS by categorizing identified risks |
| Prompt Lists | Alternative tool | Both are risk identification techniques; SWOT adds organizational perspective |
| Risk Acceptance | Output relationship | Active acceptance establishes contingency reserves for threats identified via SWOT |
Quick Review Questions
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A project manager wants to identify risks that arise from the organization's internal capabilities and limitations. Which analysis technique should be used?
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During SWOT analysis, what is the relationship between organizational strengths and threats?
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Can SWOT analysis be applied to a specific project, or only to the entire organization?
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What type of risks (positive or negative) does SWOT analysis help identify?
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A project team identifies that their strong technical expertise could create opportunities for innovation. Which part of SWOT analysis does this represent?
PMBOK v8 Reference
Section 11.2 - Identify Risks (Tool: SWOT Analysis)