What Is The CATWOE Analysis And Why It Matters In Business

The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

OriginCATWOE Analysis is a problem-solving and decision-making technique that originated from the field of systems thinking and soft systems methodology (SSM).
OverviewCATWOE Analysis is a structured approach used to understand complex problem situations, define the relevant elements, and clarify perspectives of various stakeholders. It stands for Customers, Actors, Transformation, Worldview, Owner, and Environmental Constraints. Each element is analyzed to gain a holistic understanding of the problem or situation.
Key ElementsCustomers: Identify who the beneficiaries or customers of the system or process are. They are the individuals or groups who receive or are impacted by the output.
Actors: Determine who the people or entities are that participate in or have influence over the system or process.
Transformation: Define the processes or activities that transform inputs into outputs within the system.
Worldview: Understand the perspective, beliefs, and values that influence how stakeholders perceive the problem or situation.
Owner: Identify the individual or group responsible for the overall system or process.
Environmental Constraints: Recognize external factors or constraints that affect the system or process.
How It WorksCATWOE Analysis involves a series of steps:
1. Problem Definition: Clearly define the problem or situation to be analyzed.
2. Identify Elements: Identify and describe each of the CATWOE elements—Customers, Actors, Transformation, Worldview, Owner, and Environmental Constraints.
3. Analyze Perspectives: Consider the perspectives, motivations, and concerns of each stakeholder group related to the problem.
4. Holistic Understanding: Combine the information to gain a holistic understanding of the problem situation and its complexities.
ApplicationsProblem Solving: CATWOE Analysis is used to tackle complex problems and make informed decisions.
Process Improvement: Organizations apply it to identify bottlenecks, inefficiencies, and opportunities for improvement.
System Design: In systems thinking, CATWOE helps in designing systems that align with stakeholders’ goals and values.
BenefitsClarity: CATWOE brings clarity to complex problem situations by considering multiple perspectives.
Alignment: It ensures that solutions and decisions align with stakeholders’ needs and values.
DrawbacksComplexity: CATWOE Analysis can become complex when dealing with numerous stakeholders and interconnected elements.
Subjectivity: It relies on subjective judgments and may vary based on individual interpretations.
Key TakeawayCATWOE Analysis is a structured approach for understanding and addressing complex problems by considering the perspectives of Customers, Actors, Transformation, Worldview, Owner, and Environmental Constraints. It is a valuable tool for problem-solving, process improvement, and system design. While it offers clarity and alignment, it may become complex and is subject to subjectivity in analysis.

Understanding the CATWOE analysis

In business, a significant impediment to problem-solving lies in the perception of the problem itself. 

Key stakeholders will perceive the problem differently and as a result, will come up with different solutions.

Consider the example of a plastics factory with an inefficient, loss-making production process.

An investor in the facility might seek to sell off the investment to recoup costs.

Employees may suggest automation or other improvements to increase efficiency.

Community groups may recommend expansion to drive more sales and stave off possible redundancies.

The six perspectives of the CATWOE analysis

Customers (clients)

Customers and clients are stakeholders for whom the system or process exists.

They usually benefit from the result of a process or suffer when it changes. In other words, they are the potential winners and losers of a given solution.


Actors are those who implement changes in a system or process as part of a solution.

Often, actors will be employees, suppliers, or agencies.

What is the impact of a solution on these actors, and how might they react? What role will they need to play to implement the solution?


How does the problem transform business operations?

In the case of the plastics facility, how do production inefficiencies impact logistics, distribution, and profit margins?

What adjustments to processes or procedures will need to be made once a solution is found?

World view

What is the justification for the transformation of the system or process? What is the wider impact of any solution and what issues may it cause?

Is the particular problem going to cause chronic and widespread damage, or is it more localized and short-lived?

This stage of the analysis is important because it requires that each problem is considered equally – regardless of any opinions on real or perceived discrepancies in severity.


Owners describe any individual who must necessarily take ownership of the problem. Were they part of the problem to begin with?

If not, can they be part of the solution?

Assigning ownership of a problem is also important because it increases employee buy-in and motivation.

Environment constraints

Lastly, each problem should be judged according to the realistic probability that it can be overcome.

Environmental constraints are impediments that may hinder or prevent solutions from being implemented to a process.

This includes legal issues, competition, financial regulation, and a lack of available resources or project scope.

Case studies

Example 1: A Cafe Introducing a New Breakfast Menu

  1. Customers (Clients): Regular patrons and potential customers who are looking for breakfast options. They may benefit from more variety but could also dislike the changes.
  2. Actors: Cafe staff who will prepare the new items, suppliers providing the ingredients, and marketing teams promoting the menu.
  3. Transformation: Changing the morning routine and processes. Existing workflows and ingredient storage might need adjustments.
  4. Worldview: Will introducing a breakfast menu drive more morning traffic and establish the cafe as a morning destination? Or will it dilute the cafe’s brand as a lunch and dinner spot?
  5. Owners: The cafe owner or manager who must ensure the successful rollout of the menu.
  6. Environmental Constraints: Availability of fresh ingredients, local health regulations, training needs for staff, and increased morning competition.

Example 2: A Software Company Shifting to Remote Work

  1. Customers (Clients): Users of the software who might experience changes in support or updates due to the remote work model.
  2. Actors: Employees adapting to the remote setup, IT teams ensuring secure and efficient home setups, and HR managing the transition.
  3. Transformation: The shift from office to remote might affect collaboration, productivity, and company culture.
  4. Worldview: Is remote work the future, offering more flexibility and attracting talent? Or does it alienate team members who thrive in an office environment?
  5. Owners: Company leadership must ensure that the shift is smooth and that productivity and morale remain high.
  6. Environmental Constraints: Internet stability, time zone differences, home distractions, cybersecurity concerns, and employee well-being.

Example 3: A City Implementing a New Public Transport Route

  1. Customers (Clients): Residents who may benefit from the new route, but also those who might experience disruptions or changes to existing routes.
  2. Actors: Bus drivers, city planners, construction workers, and public relations teams communicating the changes.
  3. Transformation: The introduction of the route might change traffic patterns, reduce congestion in certain areas, and alter daily commutes.
  4. Worldview: Is the new route a step toward a more connected and accessible city? Or does it divert resources from more pressing infrastructure needs?
  5. Owners: City officials and public transport authorities must oversee the project and respond to public feedback.
  6. Environmental Constraints: Budget limitations, construction regulations, public opposition or support, and environmental impact considerations.

Key takeaways

  • The CATWOE analysis is a holistic approach to problem-solving that considers a range of different perspectives.
  • CATWOE is an acronym that stands for: customers, actors, transformation process, worldview, owners, and environmental constraints. Each has a unique perspective on a single problem and each must be fairly and equally considered.
  • The CATWOE analysis advocates rigorous justification, employee empowerment, and awareness of potential constraints to successfully implement solutions within an organization.

Key Highlights

  • CATWOE Analysis: A problem-solving strategy that examines an issue from six different perspectives to gain a comprehensive understanding of the problem and develop a holistic solution.
  • Purpose: The CATWOE analysis allows businesses to consider various stakeholder perspectives, encourages out-of-the-box thinking, and combines multiple viewpoints into a unified solution.
  • Six Perspectives of CATWOE Analysis:
    1. Customers (Clients): Stakeholders who benefit from or suffer due to the process or system under consideration. They are potential winners or losers in the solution.
    2. Actors: Those responsible for implementing changes in the system or process. Actors can be employees, suppliers, or agencies involved in the solution.
    3. Transformation: How the problem transforms business operations and impacts other aspects of the organization.
    4. Worldview: The broader impact and justification for the transformation and the potential issues it may cause.
    5. Owners: Individuals who must take ownership of the problem and may need to be part of the solution.
    6. Environmental Constraints: Impediments that may hinder or prevent the implementation of solutions, such as legal issues, competition, financial regulations, and resource constraints.
  • Application: The CATWOE analysis advocates for rigorous justification, employee empowerment, and awareness of potential constraints to successfully implement solutions in an organization. It ensures that all aspects of the problem are fairly and equally considered.

Connected Analysis Frameworks

Failure Mode And Effects Analysis

A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Valuation

Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.

Paired Comparison Analysis

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Monte Carlo Analysis

The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

CATWOE Analysis

The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

VTDF Framework

It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Pareto Analysis

The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Comparable Analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Business Analysis

Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Financial Structure

In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

Financial Modeling

Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.

Value Investing

Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.

Buffet Indicator

The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.

Post-Mortem Analysis

Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.

Root Cause Analysis

In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.

Blindspot Analysis


Break-even Analysis

A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs.  A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment. 

Decision Analysis

Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.

DESTEP Analysis

A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

STEEP Analysis

The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Activity-Based Management

Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.

PMESII-PT Analysis

PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.

SPACE Analysis

The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning. 

Lotus Diagram

A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.

Functional Decomposition

Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Multi-Criteria Analysis

The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.

Stakeholder Analysis

A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Strategic Analysis

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

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