The four key components of Strategy Analysis are principles, practices, techniques, and skills. They play an essential role in identifying and validating the organization's strategic needs, defining suitable solution approach(es) and solution(s), and planning, monitoring, and engaging stakeholders to achieve the organization's strategic objectives. Techniques describe a step-by-step approach to conducting Strategic Analysis activities.

Do you need robust solutions to business problems by analyzing stakeholder problems and requirements? Here is a Strategy Analysis technique to achieve that. This blog will look at a technique called Business perspective/CATWOE with examples.

CATWOE is a technique used in soft systems methodology, developed by Peter Checkland in the 1970s. It is a tool used to analyze a problem situation and identify the stakeholders and their roles in the system. The acronym CATWOE stands for the following: 

* C - Customers

* A - Actors

* T - Transformation Process

* W - Worldview

* O - Owners

* E – Environment

The technique provides a holistic view of a problem situation and a framework for holistic problem-solving. The acronym is used to represent the key elements of a system that must be considered when designing a solution. The technique is used to identify the stakeholders involved in the system, the processes that need to be followed, the worldviews and beliefs of the stakeholders, the ownership of the system, and the environment in which the system operates. The technique has been used in a variety of industries, including healthcare, manufacturing, education, and information technology. CATWOE has been found to be a useful tool in helping to identify the key elements of a system and to identify stakeholders and their roles in the system.

Purpose

Business perspectives are the technique where key stakeholders are asked how they view, from their perspectives, the purpose, and objectives of the organization within the scope of the strategic change initiative. 

Description

For example:

  1. Bank tellers typically see their area of the business as 'A system to provide an accurate and speedy and secured cash management service.'
  2. A business development manager in the same branch may view the branch as 'A system to encourage customers to use the investment facilities offered by the bank.'

Although both perspectives are very different, they are correct from the stakeholders' viewpoint.

The Soft Systems Method offers a useful framework for defining and analyzing business perspectives, given by the mnemonic CATWOE. The elements of CATWOE are:

C = Customer: Recipient of the system's end products or services.

A = Actor: Responsible for performing business activities, typically job roles inside the organization or with suppliers.

T = Transformation: The heart of the system, transforming the input to the resulting output. 

W = World view: Stakeholder's beliefs about the organization or business system as to why it exists and what it should be doing.

O = Owner: Stakeholders who can make major decisions about the business system, who could change its direction or eliminate it.

E = Environment: Conditions under which the system must operate that are outside the control of the owner and that must be regarded as 'givens.' The PESTLE analysis provides a tool for identifying many environmental factors.

Figure 15: C.A.T.W.O.E

Usage considerations

In any change initiative, it's essential to investigate the perspectives of the various stakeholders. CATWOE technique helps investigate each stakeholder's perspective and capture information, which can be used to manage stakeholders effectively.

Advantages of CATWOE as a strategy analysis technique

  1. CATWOE provides a structured approach: CATWOE provides a structured approach to analyzing a problem and encourages a team to think critically and holistically about the issue at hand. It can help identify the root cause of the problem and the necessary stakeholders who have a role to play in the process.
  2. It can help to identify customer needs: CATWOE assists in identifying the underlying customer needs that must be addressed with a given strategy. This can help ensure that the proposed strategy addresses the customer's needs and provides the desired outcome.
  3. It can provide an actionable plan: CATWOE can provide an actionable plan for implementing the proposed strategy. This plan can be used as a roadmap for the strategy's implementation and can help ensure that the strategy is implemented in a timely and effective manner.
  4. It can help to generate creative solutions: CATWOE is a creative tool that encourages stakeholders to think outside the box and come up with creative solutions to the problem at hand. This can lead to innovative solutions that may have yet to be considered previously.



Weaknesses of CATWOE as a strategy analysis technique 

  1. It can oversimplify complex issues: CATWOE is a simplified tool that can oversimplify the complexity of a situation. It can be difficult to capture the nuances of a complex problem in the six elements of CATWOE. 
  2. It can be too narrow: CATWOE can be too narrow in its focus, ignoring external factors or other important factors in decision-making. 
  3. It is not suitable for all problems: CATWOE is not suitable for every problem and can be difficult to use in more complicated, multidimensional contexts. 
  4. It can be time-consuming: CATWOE can be an extremely time-consuming process, as it requires a lot of brainstorming and analysis to identify all the elements. 
  5. It does not provide a complete solution: CATWOE does not provide a complete solution, as it only identifies the elements of a problem. Therefore, it does not offer any actual solutions to the problem.

Relationship of CATWOE with other strategy analysis techniques 

CATWOE is often used in conjunction with other strategy analysis techniques, such as SWOT analysis, PEST analysis, and Porter's Five Forces. By combining these methods with CATWOE, organizations can gain a more comprehensive and holistic view of potential strategies and their potential outcomes. This comprehensive view can help organizations make informed and strategic decisions on how to move forward with their operations.

Future of CATWOE as a strategy analysis technique

The CATWOE analysis technique has been around for decades and is still relevant today. It provides a simple and effective way to analyze and understand the complexities of a system, and it is still widely used in many industries. In the future, CATWOE will continue to be used as a strategy analysis technique as new innovations and technologies emerge. Companies may also use more advanced versions of the technique to customize their analysis to their specific situation. As the world becomes more complex, CATWOE will continue to be a valuable tool for businesses to understand the implications of their decisions.

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