What is Current Situation Analysis?

While carrying out their commercial activities, businesses need to pay attention not only to their products and customers but also to the business environment, competition, the economy, aims and results. Accordingly, businesses must evaluate themselves, weigh their truths and mistakes, and progress in this direction as some of the primary things they can do to improve their performance. In this context, current situation analysis emerges as a concept that allows businesses to evaluate themselves in the position they are in.

Current situation analysis, which is important for businesses in this self-assessment, is a process of analysis and reporting used to measure the current status of the management board, employees, and business performance of a company based on the goals and strategies set by the company or institution. If companies do not measure how much they have reached their long or short-term goals and their current condition, it will be impossible to progress in performance as it will be unclear what has been achieved. Therefore, current situation analysis, in other words, serves as the roadmap tracking for businesses.

How is Situation Analysis Conducted?

To conduct a situation analysis, all factors affecting performance within the company should first be put on the table. Based on these factors, a current situation analysis table can be created according to the analyses and reports to be made. Examples of what firms conducting situation analyses should do include;
● Conducting competitor analysis and reporting by examining other competitors in the market
● Comparing the companies with other firms by examining their position in the sector
● Identifying correct or incorrect strategies pursued in marketing the product or service
● Conducting annual budget and financial condition calculations
● Analyzing the comparison between target sales figures and actual sales figures
● Examining the reflection of service quality on customers
can be listed.

Stages of Situation Analysis

Businesses need to progress in certain stages while conducting a situation analysis. First, various factors should be examined under specific headings, and all items affecting the business should be classified. Examples of the headings examined in the context of current situation analysis include external environment analysis, internal analysis, SWOT analysis, 5C analysis, and Porter’s 5 Forces analysis. Thanks to the mentioned stages and techniques, companies can evaluate their strengths and weaknesses, allowing for different analyses to be conducted in separate groups. This classification makes it easier to focus separately on areas that need improvement and to see all factors together within a big picture.

What is 5C Analysis?

As one of the situation analysis methods, 5C analysis is an analysis used by firms to evaluate their macro and micro frameworks. The primary aim of the 5C analysis is to obtain accurate analyses by examining the market, the environment, and the sector in general. Among the analytical techniques, 5C, which is one of the most widely used techniques, focuses on the external factors of the institution. The name 5C comes from the words company, competitors, customers, collaborators, and climate, which mean firm, competitor, customer, partners, and environment in English.

To conduct a 5C analysis, we first need to list the 5 factors we have mentioned and state what we aim to achieve:
● Company: Within the scope of the company, the objectives and strategies pursued in the 5C analysis are examined. It aims to focus on areas that need to be improved by evaluating the company's strengths and weaknesses and stabilizing its strong points. In the analysis where the objectives and goals are defined first, then position, performance, and product reporting are carried out.
● Competitors: In every sector, there are competitor firms facing each other in the market. While these competitor firms can sometimes pose a threat to companies, they can also help firms learn new things and adapt to the market through proper analyses. Therefore, conducting competitor analyses is very important. In this context, competitors are identified, evaluated, and the possible moves these competitors can make are predicted.
● Customer: Conducting customer analysis and examining consumer behavior create a roadmap for the firm on how to proceed. In this context, customer type analysis, customer behavior in the market, and demand reports are prepared.
● Partners: Partners play a crucial role in contributing ideas and recognizing business opportunities within firms. In this context, the performance of the firm will be enhanced with analyses of agencies, suppliers, distributors, and other partners.
● Environment: Here, the concept of environment examines the work environment and external factors affecting the firm. Therefore, external environment analysis should be conducted. In this context, external factor analysis techniques such as PEST analysis can be utilized.

What is Porter’s 5 Forces Analysis?

According to Michael Porter’s recommended 5 forces analysis, firms aim to reduce risk in competition and generate potential profit increases by utilizing 5 different powers. The 5 forces mentioned in this model include the threat of substitute products, threats created by existing competitors, threats posed by new entrants to the market, the bargaining power of suppliers, and the bargaining power of customers.
● Threat of substitute products: In this context, the product is compared to similar, easier, and more attractive products to examine possible threat factors. These threat factors are listed as switching costs, pricing, product quality, and product performance.
● Competition: In this context, necessary analyses are conducted by examining factors such as competitors, exit barriers from the market or barriers to rising within the market, and the company’s growth rate in the sector.
● Threats posed by new entrants to the market: New businesses entering the market can threaten existing businesses doing business. Therefore, specific analyses and reports should be produced for these new firms, discussing how the possible threats can be mitigated.
● Bargaining power of suppliers: Suppliers play a building block role for a business to stay in the market. For this reason, changes in the number of suppliers, buyer switching costs, and threats such as the supplier taking the business into their own hands should be prepared for.
● Bargaining power of buyers: The bargaining power of buyers is a technique that works on service and product focus. In this context, factors such as the balance of the number of consumers and businesses, switching costs for brands, and the consumer taking the business into their own hands are examined.

What is Situation Analysis Consulting?

Firms need to conduct evaluations of their situation and require an objective and impartial examination to assess themselves. In this context, situation analysis consulting emerges, providing the necessary analysis and reporting support to firms. In the current situation analysis, where problems that could not be detected from the inside are viewed from a second perspective, work is done to produce solutions for risks and take precautions for other possible risks. The supports provided to firms in the situation analysis consulting are as follows:
- Financial Analysis
- Marketing Analysis
- Customer Management Analysis
- Sales Analysis
- Human Resources and Organization
- Corporate Reports

Why is Current Situation Analysis Necessary?

Current situation analysis is very important for firms to detail the general operation of all units and set future goals. It evaluates how companies can adapt to innovations, the balance of expenses and income, and the effects of internal and external environmental factors in full detail. Current situation analysis is a very effective method for every important decision that individuals need to take regarding both their department and their companies.

What to Consider When Conducting Current Situation Analysis

• All available data must be complete and accurate when conducting a current situation analysis. The individuals or teams evaluating this data must be experts in their field.
• The report obtained as a result of the current situation analysis should be read carefully, and necessary actions should be taken.
• Current situation analysis should not only be done in cases of any negative situation but should also be performed periodically, and results obtained from the evaluation should be examined meticulously.
• It should not be expected that the current situation analysis will have an immediate impact; it should be remembered that if necessary work is carried out, it will benefit the company in the medium or long term.