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SWOT analysis and situation analysis are closely linked and can be combined to provide a comprehensive understanding of the competitive environment. The three C’s (companies, competitors, and customers) can also be useful in developing a competitiveness strategy. While SWOT analysis can quickly cover several areas, it may be too superficial for a comprehensive situation analysis that includes technical, socio-political, and general market factors. Once the situation analysis is complete, a strategy can be developed and periodically adjusted through another SWOT analysis.
A strengths, weaknesses, opportunities and threats (SWOT) analysis can provide insight into the competition and your organization’s ability to compete – you need to complete an effective situation analysis. This is the main connection between situation analysis and SWOT analysis. Once both analyzes are completed, the organization provides the information needed to strategically address the competition in the marketplace.
In addition to situational analysis and SWOT, the three C’s can be another useful part of a company’s competitiveness strategy. The Three C’s is the examination of companies, competitors and customers and covers everything from their internal functions to the effect they have on the market. Using the three-point method and SWOT analysis together can be a key part of generating a comprehensive situation analysis.
Situation analysis and SWOT analysis can be combined into one process, depending on the needs of the organization. If only a quick assessment is needed, a SWOT review may be sufficient. The analysis can also be the starting point for a more comprehensive review.
Another strong link between situation analysis and SWOT analysis is that SWOT analysis is often the most effective way to start exploring the market. A SWOT analysis can quickly cover several areas. It can be useful for quickly creating clarity in complex situations. The analysis can also provide a concise overview of the current competitive environment.
One of the weaknesses of SWOT analysis is that it can sometimes be too superficial for the purposes of a particular situation analysis. Some of the additional areas that may need to be examined in a situation analysis include the technical, socio-political and general market environment. These factors expand the analysis beyond competitive boundaries and help an organization more fully assess what kinds of challenges and opportunities it can expect.
Once the situation analysis is complete, the organization can begin to create a strategy to thrive in the current and future market environment. To remain effective, this plan will need to be periodically adjusted. In some cases, such as when there has been a drastic change in the market or general industry, another major overhaul may need to be performed. For periodic review, simply conducting another SWOT analysis is sufficient, as it can work as a way to get a quick update on your current environment.
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