What is situational analysis?

What is Situational Analysis?

Hello there my name is Martin Henley, this is the what the f series and in this episode number six we’re answering the question what is situational analysis?

In answering the question what is situation analysis there are five things we’ll be sharing with you we’re going to look at this tricky word situational; we’re going to give you a definition of analysis; then we’re going to give you a definition of situational analysis before we think about why you need situational analysis and how you do situational analysis.

Let’s get this started Ricky.

What is Situational?

So it sounds like we’re addressing something quite technical today but I don’t believe it is technical, I think it just sounds technical because of this word situational. I can tell you quite honestly I’ve never used the word situational in any other sense than if I am talking about a situational analysis so I was interested to learn what it actually means so we went to Lexico, as delivered by Google at the very top of their search results for a definition. Lexico tell us that “situational relates to or is dependent on a set of circumstances or state of affairs” — so I’m none the wiser because doesn’t everything relate to or depend on a set of circumstances or state of affairs? They go on to say that situational relates to the location and surroundings of the place, so surely everything that isn’t imaginary is happening in a place so is everything situational? In which case why do we need this word?

I was still confused so I went to your dictionary.com for a definition of situational and what they tell us is that “situational is a thing in regards to its surroundings or circumstances.” What this means is that situational refers to the way that things change in different circumstances or in different situations. If you think about water in a very cold environment it becomes ice, if you think about water in a very hot environment then it becomes steam — so this is what situational means, in that sense water is situational.

So I don’t believe it’s necessary to use the word situational in a situational analysis and in fact Wikipedia, smallbusiness.com and the balancesmallbusiness.com none of these sites bother to talk about situational analysis, what they talk about is a situation analysis which I think makes much more sense and is something that we can all understand.

What is Analysis?

Whilst we’re breaking this down we may as well grab a definition of analysis and we got this one from The Cambridge Dictionary. What they tell us is that “analysis is the process of studying or examining something in an organised way to learn more about it.” The reason I’m taking the trouble to give you this definition is because there are two things here that are going to be important to your situational analysis. Firstly that you study your situation in an organised way and the second is that you learn more about your situation.

What is Situational Analysis?

So let’s put these things together to get a definition of situational analysis. We went back to the balancesmallbusiness.com who gave us an actual definition of situational analysis. What they tell us is that situational analysis is “an analysis of the internal and external factors of your business, it identifies a business’s capabilities, customers, potential customers and business environment and is an essential part of any business plan.” What’s important here is that you’re thinking internally and you’re thinking externally, you’re thinking about your businesses capabilities, where are you now and where can you go from here.

Why do you need a Situational Analysis?

Which brings us then to point number four and point number four is the question why do you need a situational analysis and I can give you three good reasons. The first reason is that you need a reality check so you don’t rely on what you intuitively think is going on in your business or what you are hoping is going on in your business. A situational analysis is your opportunity to find out exactly how your business is and how your business is performing.

When I think about situational analysis I think about Voltaire. What Voltaire said is that “you should judge a man by his questions rather than his answers. A situational analysis is your opportunity to really interrogate your business and understand what is really going on.

The second reason you need a situational analysis is because you need a starting point. You know when you are at a dinner party and somebody’s late because they’re lost and they’re on the phone and you’re saying where are you and what can you see? The reason you have to ask that is because it’s impossible to direct anyone anywhere unless you know exactly where they are. What’s important is that you benchmark right at the beginning of your marketing where you are starting from.

And that leads us in to reason number three which is about progress. What we are talking here is you investing your time, your energy, your money in making your business successful and what you need to be able to do is enjoy and experience that progress. If you can’t evidence the progress of your marketing then you are going to become very demotivated, very dispirited and you’re going to give up on this whole process unless you can see that you are actually heading in the right direction.

How do you do Situational Analysis?

If you’re hearing me I’m hoping you’re getting excited, you’re thinking “you know what I am ready to conduct a proper study of my business, to understand its capabilities so I can have a starting point and I can measure my progress but I don’t know how to do situational analysis. Well conducting a situational analysis isn’t actually terribly difficult and we are going to be going through the steps in the next few videos — so now might be a good time to subscribe if you’re interested in getting your situational analysis done.

The first thing I would say about a situational analysis is that what you’re looking for when you interrogate your business is data. The great thing about data, and I’m talking specifically about numbers, is that numbers are objective. As long as you go by the numbers your hopes and dreams and best wishes won’t get in the way of you establishing exactly how your business is performing. Then you just need to know about the components. The first thing you need to understand is your market and that will be the topic of video number seven — What is a market? Then you need to understand your offering — what you’re taking to market, your customers, your performance and your competitors. These are the steps that we will be going through in the next few videos.

If you are still with us well done, you now know exactly what situational is — it doesn’t really make a great deal of sense; you’ve had a definition of analysis; we’ve had a definition of situational analysis; you know why you need a situational analysis and you are getting a sense already of how to do situational analysis.

What should you do if you found this Situational Analysis definition useful?

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We’re done here Ricky

Martin Henley

Martin has built a reputation for having a no nonsense approach to sales and marketing and for motivating audiences with his wit, energy, enthusiasm and his own brand of audience participation.

Martin’s original content is based on his very current experience of running effective marketing initiatives for his customers and the feedback from Effective Marketing’s successful and popular marketing workshops.