Situation analysis
Encyclopedia
Situation analysis is a marketing
term
, and involves evaluating the situation and trends in a particular company's market
. Situation analysis is often called the "three c's", which refers to the three major elements that must be studied:
The number of "c's" is sometimes extended to four, five, or even six, with "Collaboration
", "Company", and "Competitive advantage".
:
The Situation Analysis allows a company to understand their own internal and external situation, the customer, the market environment, and the firm’s own capabilities. A SWOT Analysis
is a type of situation analysis that examines the Strengths and Weaknesses of a company (it’s internal environment) as well as Opportunities and Threats in the market (in the external environment).
The "5 C Analysis" http://www.netmba.com/marketing/situation/ tends to be the most useful and common approach to conducting a Situation Analysis. This approach is built off the "3 C Analysis", however is more extensive and provides more background and understanding to the situation. In this approach a firm will examine the:
The final written format of the situation analysis is ultimately broken down into different sections regarding each of the different “Cs” http://planningskills.com/askdan/20.php, and a thorough examination of each of them. It may also include information on the use and cost of different methods of advertising that the company desires to use for the launch of the product.
A situation analysis helps a company determine whether the rewards of a product outweigh the risks, depending on if they are entering it in a new market, developing a brand/product line extension, or creating a completely new product. Ultimately, the purpose of the situation analysis is to identify and define the product position, as well as analyze the environment in which it will be placed in, and will attempt to help the company determine if the product will survive and thrive, if drastic changes must be made for it to be successful, or if any more advancement on the product should be stopped immediately.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
term
Jargon
Jargon is terminology which is especially defined in relationship to a specific activity, profession, group, or event. The philosophe Condillac observed in 1782 that "Every science requires a special language because every science has its own ideas." As a rationalist member of the Enlightenment he...
, and involves evaluating the situation and trends in a particular company's market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
. Situation analysis is often called the "three c's", which refers to the three major elements that must be studied:
- Customers
- companiesCompanyA company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
- competitors
The number of "c's" is sometimes extended to four, five, or even six, with "Collaboration
Collaboration
Collaboration is working together to achieve a goal. It is a recursive process where two or more people or organizations work together to realize shared goals, — for example, an intriguing endeavor that is creative in nature—by sharing...
", "Company", and "Competitive advantage".
Background
The Situation Analysis is a step that all marketing firms must take in order to be successful. It is the second step in conducting a Marketing PlanMarketing plan
A marketing plan may be part of an overall business plan.Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use....
:
- IntroductionIntroductionIntroduction, The Introduction, Intro, or The Intro may refer to:* Introduction , an opening section of a piece of music* Introduction , a beginning section which states the purpose and goals of the following writing...
- Situation AnalysisSituation analysisSituation analysis is a marketing term, and involves evaluating the situation and trends in a particular company's market. Situation analysis is often called the "three c's", which refers to the three major elements that must be studied:* Customers...
- Objectives
- Budgeting
- StrategyStrategyStrategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
- Execution
- EvaluationEvaluationEvaluation is systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards.Evaluation often is used to characterize and appraise subjects of interest in a wide range of human enterprises, including the arts, criminal justice,...
The Situation Analysis allows a company to understand their own internal and external situation, the customer, the market environment, and the firm’s own capabilities. A SWOT Analysis
SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture...
is a type of situation analysis that examines the Strengths and Weaknesses of a company (it’s internal environment) as well as Opportunities and Threats in the market (in the external environment).
The "5 C Analysis" http://www.netmba.com/marketing/situation/ tends to be the most useful and common approach to conducting a Situation Analysis. This approach is built off the "3 C Analysis", however is more extensive and provides more background and understanding to the situation. In this approach a firm will examine the:
- Company: This includes the product line, product image, production technology, as well as company culture and goals
- Collaborators: Those who help the company develop, produce, or distribute the product.
- Customers: The ideal target segment (researching demographicsDemographicsDemographics are the most recent statistical characteristics of a population. These types of data are used widely in sociology , public policy, and marketing. Commonly examined demographics include gender, race, age, disabilities, mobility, home ownership, employment status, and even location...
, geographic location, and psychographics), consumer trends and the characteristics of purchases they make, consumer motivation, as well as market size and growth - Competitors: Both actual and/or potential, direct and/or indirect. This includes looking into their strengths and weaknesses, market share, products, and product or market positioning
- Climate/Context: Research in regards to the current or future political, economic, social/cultural, technological environments that will ultimately influence the success or failure of the product (PEST AnalysisPEST analysisPEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management...
). A thorough historical context can also be useful.
The final written format of the situation analysis is ultimately broken down into different sections regarding each of the different “Cs” http://planningskills.com/askdan/20.php, and a thorough examination of each of them. It may also include information on the use and cost of different methods of advertising that the company desires to use for the launch of the product.
A situation analysis helps a company determine whether the rewards of a product outweigh the risks, depending on if they are entering it in a new market, developing a brand/product line extension, or creating a completely new product. Ultimately, the purpose of the situation analysis is to identify and define the product position, as well as analyze the environment in which it will be placed in, and will attempt to help the company determine if the product will survive and thrive, if drastic changes must be made for it to be successful, or if any more advancement on the product should be stopped immediately.
See also
- Health situation analysis
- Marketing mixMarketing mixThe term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients",...
- SWOT analysisSWOT analysisSWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture...
- Marketing PlanMarketing planA marketing plan may be part of an overall business plan.Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use....