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What Is a Current Situation Analysis?

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  • Written By: Jessica Ellis
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  • Last Modified Date: 29 August 2016
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A current situation analysis is a clear, concise look at the present state of a business within its market. Often used to formulate marketing strategy, a current situation analysis tends to examine several factors that play into the current standing of the business, including macroeconomic trends, customer data, and information about competitors. The analysis of this data may be done in several different ways, including the popular SWOT (strengths, weaknesses, opportunities, threats) method. Using this information, a situation analysis provides a summary of the business as it stands, as well as a forecast 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 national economy, new labor laws in the nation of a supplier, or a change to state tax laws may result in shifting tides of fortune. Macroeconomic analysis can summarize big picture trends that may effect marketing strategy, financial position, or the market share of the company.

Customer data is one of the most critical components of a current situation analysis. This data may be gleaned through customer surveys or even simple observation. Some of the items to analyze might include the age, gender, income level, educational background, or marital status of a typical customer. Knowing what type of customer is currently patronizing the business may help determine future marketing attempts to reach out to different demographics.

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Competitor data helps determine where a business stands in relation to similar organizations. To gain this data for a current situation analysis, it is important to review consumer product reviews, stock pricing, and relative share of the market. Many firms hire outside analysts to ensure an objective comparison that clearly shows where each organization stands in relation to one another. Competition analysis may examine direct competitors, such as a shoe store comparing itself to other shoe stores. Indirect competition, which refers to businesses that may offer a different product that fulfills the same need, may also be included in current situation analysis.

Once data on the current situation is gathered an organized, the process of analysis may truly begin. The SWOT method helps break down data into one of four categories: strengths, weaknesses, opportunities, and threats. A strength of a business might be a high market share or diverse customer base. A weakness might be an unrecognizable or dated brand name and logo. Companies want to take advantage of opportunities for growth and improvement, such as an established with a supplier who has just become extremely trendy. Finally, it is important to prepare for threats, like the potential for loss of business once a new mall opens up in the area.

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bluedolphin
Post 3

@stoneMason-- You may be able to find a template for SWOT somewhere but the categories are fairly simple. It looks at the opportunities and threats, and strengths and weaknesses. Strengths and weaknesses are about the present situation, whereas opportunities and threats have implications for the future. But mapping out all of these areas, you can get a good idea of where the business or organization stands right now and where it is likely to be in the future.

The goal isn't just to analyze the current situation but to also make predictions about the near future, and if possible, prevent weaknesses from developing by dealing with the treats now.

I think this is what makes the SWOT analysis better than some other types because it has greater applicability for upcoming decisions at a business.

stoneMason
Post 2

I'm not an analyst but my boss asked me to prepare a current situation analysis for our organization. How do I go about it? The SWOT method sounds both useful and straightforward. But what information do I need to include in each category?

serenesurface
Post 1

Analyzing the current situation of a business and making predictions about the future is so important that even small businesses are hiring analysts these days. Analysis reports can be extremely daunting who may not know which factors to look at and what the numbers may mean. That's why all businesses have at least one analyst who keeps track of the numbers at all times. Some smaller businesses cannot afford full time analysts so they often hire them to do period analyses for that specific period.

If anyone is considering a career in this line of work, I can tell you that financial analysts will always be in demand. Make sure that you get the training to learn the use of analysis software and databases. Especially large companies expect their analysts to use these for preparing current situation and future reports.

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