A situational analysis is an attempt to analyze how external factors (for example, the instability of the state’s economy as a whole) affect the activity of a company. Moreover, the firm itself (or the enterprise) cannot influence these circumstances in any way - it is not in its competence.
What is this technology good for? And, in that it is suitable not only for any one particular situation, but for their whole complex. This is the universality of the method and its simplicity.
Why analyze
It is necessary to conduct it so that the business can successfully develop further. In the process of analysis, first all negative factors affecting the activities of the enterprise are determined, and then they find ways to eliminate the consequences of these critical circumstances. Of course, it is hardly possible to completely eliminate further repetition of such cases, but you can try to minimize the costs and expenses of the company in the course of its activities. This is exactly what the professionals specializing in situational analysis do. Moreover, such events should be carried out on an ongoing basis in order to be constantly aware of the resources of not only your company, but also your competitors. The analysis allows you to evaluate the objective data of almost all entities that entered the market: suppliers, manufacturers, customers, and so on.
What is the essence of the procedure
A study of a situational analysis carried out in a specific period of time allows you to analyze all the changes that have occurred in the market; the company's activities in these new market conditions, as well as developing the right tactics and strategy for the future, so that the company maintains its competitiveness, favorable pricing policy, as well as decent quality of its products or services.
On a note! The purpose of conducting a situational analysis is to create not only new strategic techniques, but also the improvement of the "old" ones. That is, those that already exist, simply increasing their effectiveness.
Tasks of a situational analysis
Properly and on time analysis performed helps to solve the following problems:
- To show in all the intricacies to the director and heads of various departments a picture of the situation in which the company is at this particular moment.
- Identify the strengths and weaknesses of the economic and production activities of the company. That is, a sober assessment of the current state of affairs and an objective assessment.
- Investigate the future development of the enterprise. How realistic are the chances of overtaking your competitors.
- To give the opportunity, with the help of a situational analysis of the organization, to the leadership of even a prosperous company “to descend from heaven to earth” and “chart new horizons” (that is, even more promising than there are at the moment), since “there is no limit to perfection”.
- Become an impetus to determine ways and methods of overcoming a crisis and develop new strategic decisions.
- Identify the contingent of their consumers; characterize them, it is better to know their desires in the acquisition of a product (or service); as well as evaluate the demands of the market and the speed of its development.
- Understand, using system-situational analysis, the prospect of their competitiveness. This can only be done with information about the strengths and weaknesses of your business rivals. Moreover, the analysis will be more effective if not only existing, but also potential competitors are taken into account.
Important! The result of the study must certainly be the emergence of new ideas and goals (situational analysis, of course, will be a real push in this).
Order of conduct
Theoretically, in the course of research, a thorough study of such main areas of activity of any enterprise as the production itself, personnel service, supply, marketing, finance, and much more.
On a note! In practice, only those areas that are the most important and vulnerable in this particular critical situation are subject to situational (marketing) analysis. Moreover, a full range of studies will cost the company a pretty penny. Not everyone can afford it.
The situation analysis method involves several stages:
- Definitions and formulations of a situation representing a problem.
- Establishment of the main factors determining the development of a particular situation.
- Development of a unified research concept.
- Definitions of the object to be analyzed.
- The study itself.
Important! The analysis can be carried out exclusively under the direction of the director (or general director) of the company. It is he who turns to marketers with a request to conduct the necessary studies of all aspects of his activities.
In the process of work, questionnaire sheets and various questionnaires are often used. Carrying out situational monitoring ends with a report, which reflects all the problems of the company; ways out of them, including a new strategy that would allow the administration of the enterprise to adequately respond to all changes occurring in the market, and ways to help achieve positive results in the economic and production activities of the company in the current circumstances.
Application features
If you think that the analysis is used exclusively in times of crisis that periodically happen with each company, then you are very mistaken. Everything is completely wrong. In international practice, the method of situational analysis is used without fail once (at least) every six months. Moreover, this is in no way connected with the current state of affairs at the enterprise.
On a note! The use of such research allows even successful firms to see new opportunities for further prosperity and problematic issues that may arise in the future.
Technological techniques for establishing the main factors affecting the situation
Today, the following methods are used:
- the so-called brain attack;
- questionnaire, consisting of two stages;
- factor analysis (that is, the study of the main points that affect a specific situation);
- scaling
- modulation of the situation;
- case method.
"Brain attack"
A significant role in using this method is assigned to the director of the company, who chairs each meeting of the expert commission. In practice, it looks like a regular production meeting, at which they discuss a particular problem; main factors leading to a critical situation; as well as ways to eliminate them.
“Brainstorming” consists of two stages:
- First. Includes generating a variety of ideas and opinions. The main goal of this stage is to establish a friendly atmosphere that allows absolutely everyone to speak out and convey their point of view to the rest. As a result, the most complete picture of the main circumstances influencing the development of the situation as a whole should be formed. In the process of speaking, the chairman (that is, the director) of the commission should not show support to one or another speaker. Each opinion (or idea) should be discussed, even if at first glance it seems deliberately unpromising or absurd.
On a note! If during the “brain attack” the chairman of the expert commission only supports what seems to him “has the right to life,” then, most likely, the value of such meetings will be reduced to zero.
- Second. Discussion of statements and opinions, their analysis and development of a unified position on a specific problem. At this stage, having analyzed all the factors that were identified initially, only those that seem to be the main ones are left. In order to accomplish this in the best way, it is advisable to divide all the experts involved in the “brainstorming” into two camps: supporters of the idea, who provide certain evidence in favor of the stated point of view; and opponents, who also zealously refute it. The chairman of the commission, after listening carefully to everyone, renders his verdict on the importance of this or that factor in terms of its effect on the current situation.
Important! If in the course of a situational analysis conducted in this way, the commission concludes that some points were completely unjustifiably ranked as fundamental, then they are immediately excluded from the general list. And vice versa, if specialists in the process of discussion reveal the presence of additional factors that significantly affect the state of affairs in the company, then they are immediately included in the list to be discussed in more detail.
Two-stage survey
At the first stage of this technology, each of the experts invited to the expert commission fills out a questionnaire (questionnaire), specially designed for such situations. In it, participants indicate all the factors that, in their opinion, affect the state of affairs in the company; and also give their own justification of why precisely these moments they are among the most important. Moreover, all circumstances have the degree of their influence on the situation (in decreasing order of importance).
At the second stage of the situation analysis of the enterprise, the review of previously completed questionnaires begins, which is carried out in a cross-sectional mode. This means that the questionnaires filled out by some study participants are analyzed by other specialists. That is, they either agree with the proposed version, or reject it with an argument, making a mandatory ranking of all the factors presented.
With this technology, the commission also includes an analytical group that processes the received personal data. At the end of their work, analysts submit a report to the head of the enterprise, who decides on the main factors that affect the situation.
On a note! Both the “brainstorming” and the two-stage questionnaire can be absolutely accurately classified as universal technologies, which can be perfectly used not only to determine the main points that affect the company's economic and production situation, but also to quickly solve other situational tasks.
Factor analysis
Similar technology can be used for marketing research and situational analysis. The method is based on the assumption of the analytical dependence of statistical data on planned and actual indicators that reflect the current situation. In the process of factor analysis, not only a list of circumstances and their classification (that is, internal or external; significant or non-essential; major or minor) is determined, but also coefficients (or loads) that characterize the influence of each of the stated points on indicators reflecting the true state and the development of the situation as a whole. The results obtained make it possible to rank the factors according to the degree of their importance in terms of their influence on the state of affairs in the company.
Scaling
A large flow of information is not always a boon. So in this case: too many factors can lead to a decrease in the effectiveness of the analysis. To avoid this, it is necessary to differentiate all the incoming data about the current situation, that is, reduce their number and increase the content. Using the multidimensional scaling method, you can solve all these issues. As a result of research, all circumstances are thoroughly analyzed and ranked. The result is a kind of scale.
Situation modeling
This method allows you to get a more complete picture of the current state of affairs and to determine what is the driving force of the process. No one will argue that the main indicator of the economic activity of any company is exclusively profit. This is true.
And on what factors does profit depend? Of course, from the volume of production, the cost of production, its current demand in the market, as well as from competitiveness. If each of the indicators is multiplied by the corresponding coefficient, then it is easy to calculate the fully expected value of profit in the presence of certain factors, depending on which it is.
Using this method, it is possible to carry out either long-term (for example, five years) forecasting or short-term forecasting. Much depends on economic stability in the country as a whole.
Case method
The purpose of this technology is to identify a problem situation, analyze it and determine the way out of it. The case method itself is not a research method, the problem is presented through a specific set of facts-difficulties that we had to face in the process of the economic and production activities of the enterprise. The case method is the ability to work in a team.
Swot analysis
The SWOT analysis (situational analysis), which was developed by the American professor Kenneth Andrews, helps to obtain more complete information about the strengths and weaknesses of the company and give a start to new goals and objectives. The abbreviation SWOT stands for:
- S - strength.
- W - weakness.
- O - opportunities.
- T - troubles (problems).
The very name of the method contains the fundamental principles of any entrepreneurial activity.
This method says that you don’t need to “go in cycles” in the analysis, but rather go straight to the designation of the main tasks, that is, the definition of the level that you would like to achieve in the process of implementing the plan. And you don’t have to “hover in the clouds” and wish for a pipe dream. The goal should be concrete, simple and achievable. All efforts should be concentrated on achieving it.
Important! Remember that minor factors in this analysis are not at all important.
Finally
In addition to the listed technologies, you can use other methods of conducting a situational analysis (an example is the methods of qualimetric research or the formation of generalized criteria). Go for it! And you will succeed!