What Is the Connection between Situation Analysis and SWOT Analysis?
A strengths, weaknesses, opportunities, and threats (SWOT) analysis can provide information about competitors' and an organization’s own ability to compete — it is necessary to complete an effective situation analysis. This is the primary connection between the situation analysis and SWOT analysis. Having completed both analyses gives an organization the information it needs to strategically address competition in the market.
Besides situation analysis and SWOT, the three c’s method can be another useful part of strategizing a company's competitiveness. The three c's method is the examination of company, competitors, and customers, and covers everything from their internal functions to the effect they have in the market. Using the three c's method and SWOT analysis together can be a key part of generating a comprehensive situation analysis.
The situation analysis and SWOT analysis can be combined into a single process, depending upon the needs of the organization. If only a quick assessment is needed, then a SWOT review may suffice. The analysis can also be the starting point for a more comprehensive review.
Another strong connection between the situation analysis and SWOT analysis is that SWOT analysis is often the most effective way to begin exploring the market. A SWOT analysis can cover several areas quickly. 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 the 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, sociopolitical, and overall market environment. These factors expand the analysis beyond the boundaries of competition and help an organization to gauge more completely what kinds of challenges and opportunities it can expect.
Once the situation analysis has been completed, the organization can begin to create a strategy for thriving in the current and future market environment. For it to remain effective, this plan will need to be adjusted periodically. In some cases, such as when there has been a dramatic change in the overall market or industry, it may be necessary to perform another comprehensive review. For periodic review, simply conducting another SWOT analysis may suffice, as it can function as a way to get a quick update on the current environment.
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