catwoe-analysis

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.

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

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?

Transformation

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.

Owner

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.

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.
  • To successfully implement solutions within an organization, the CATWOE analysis advocates rigorous justification, employee empowerment, and awareness of potential constraints.

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.
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.
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.
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.
competitor-analysis
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-principle-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-company-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
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.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"