A current situation analysis is a concise review of a company’s market position, including macroeconomic trends, customer data, and competitor information. The SWOT method is often used to analyze data and identify strengths, weaknesses, opportunities, and threats. This analysis helps predict future performance and progression.
A current situation analysis is a clear and concise look at the current state of a company in its market. Often used to formulate a marketing strategy, a state-of-the-art analysis looks at several factors that influence the current business situation, including macroeconomic trends, customer data, and competitor information. Analyzing this data can be done in several ways, including the popular SWOT method (strengths, weaknesses, opportunities, threats). Using this information, a situation analysis provides a summary of the company as it is, as well as a prediction of performance and progression in the near future.
Macroeconomic trends can be significant when performing a situation analysis. Even for a small business in a small town, a downturn in the national economy, new labor laws in a supplier’s nation, or a change in state tax laws can cause the tides of fortune to change. Macroeconomic analysis can summarize general trends that may affect a company’s marketing strategy, financial position, or market share.
Customer data is one of the most critical components of a current situation analysis. This data can be collected through customer surveys or even simple observations. Some of the items to analyze might include a typical client’s age, gender, income level, educational background, or marital status. Knowing what type of customer is currently patronizing the business can help determine future marketing efforts to reach different demographics.
Competitive data helps determine where a business stands in relation to similar organizations. To obtain this data for an analysis of the current situation, it is important to review consumer product reviews, stock prices and relative market share. Many companies hire outside analysts to ensure an objective comparison that clearly shows where each organization stands in relation to one another. Competitive analysis can look at direct competitors, such as a shoe store comparing itself to other shoe stores. Indirect competition, which refers to firms that can offer a different product that satisfies the same need, can also be included in the analysis of the current situation.
Once the data on the current situation is collected and organized, the analysis process can really begin. The SWOT method allows you to divide data into one of four categories: strengths, weaknesses, opportunities and threats. A company’s strength could be a high market share or a diverse customer base. A weakness could be an unrecognizable or dated brand and logo. Companies want to take advantage of opportunities for growth and improvement, such as those established with a supplier that has just become extremely trendy. Finally, it’s important to be prepared for threats, such as the potential for lost business once a new mall opens in the area.
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