Applied element method is a numerical tool for the analysis of structures. It is a rigid body method in which flexibility is introduced with the help of springs. It has few advantages such as lesser processing time and memory requirement than other numerical methods. In conventional numerical methods, node‐to‐node connection is necessary, and hence, transition elements are used to connect elements of different sizes. But in applied element method, node‐to‐node connection is not required, and hence, transition element is not used. As springs are used for connecting the elements, cracking can be modelled by removing the springs. Hence, failure analysis can be done more realistically using applied element method. The complete analysis up to collapse of the structure is also possible with applied element method. To illustrate this fact, applied element method is used to determine the stress concentration factor in this paper. Stress concentration factor in plate of finite width with circular and elliptical hole are determined with reasonable accuracy.