Making a good situation analysis for your company is the first step to getting ahead of the competition. Paying attention to market trends and evaluating the internal and external factors that may impact your business can help you to grow even in bad market times.

Strategic planning is vital for any kind of business or organization, especially when thinking about competitive advantage and the business environment in general. It should be considered before planning any new project or marketing plan to optimize the overall performance of the company.

When running a business, it is very important to keep an eye on what is happening in the market environment, including internal and external factors. Having a tool that tells you how to do it precisely and in an optimized way can help you better understand the competitive environment and your target market.

It also helps project managers to understand the company’s strengths and the current state of the internal services. An example of this planning process is when SWOT analyses the chances of new businesses taking place on the market based on what is happening around the world and the consequences of it. For analyzing the external factors affecting the organization, the most common tool used is the PESTEL analysis.

A SWOT analysis is a tool for strategic planning and management projects that considers the most important aspects of both external and internal factors. By doing this, you can track the most effective business plan for your company to achieve your future goals, no matter if they are growing the external forces or just understanding more about your new competitors.

There are dozens of SWOT analysis examples available online and the technique is used even by the biggest companies in the world, like Microsoft, for example. From simple SWOT analysis to deeper ones, the SWOT matrix is composed of four main topics: Strengths, Weaknesses, Opportunities, and Threats.

The PESTEL tool can also be considered a SWOT analysis with a focus on the external environment. It is composed of six categories that help the manager to understand the new potential customers better and plan a new marketing campaign based on this public. 

Political

This category analyzes the external factors regarding situations like tax policy, political stability, and trade restrictions, for example. It is responsible for reflecting on all the topics that have an impact on companies when talking about political problems and situations.

Economic

Here the main subject is the topics regarding the economic field of the companies. Some of the main topics considered in this category are the inflation rates and the unemployment rate.

Social

Perhaps the most important category when talking about consumption habits and market tendencies. The situation analysis in this category considers items like career attitudes and age distribution of the population to see clearly which fraction of the population you are talking to. This makes it easier to write your next marketing plan.

Technological

In this category of the situation analysis, you have to consider things like the level of innovation of new technologies and the technology incentives that are provided by both government and private institutions. The main reason for this category is to evaluate the level of technology that companies can aggregate into their production.

Environmental

The objective of this category is to analyze things like climate change and pressure from NGOs, for example. This causes to affect many aspects of the business, especially if you have a company that works with seasonal sales.

Legal

The last topic of the PESTEL analysis considers aspects like consumer protection laws and health and safety laws. This analysis will tell you how to conduct important details of your business, like the working hours policy and how you relate to the consumers, for example.

Another great tool to include in your SWOT analysis templates is Porter’s five forces. They help you to better understand the direct competition and your position among them.

The other reason for doing this analysis is to understand how profitable it is to compete in a specific market and the consequences of it. By doing this, you make sure that it is worth following a specific strategy or writing a new plan based on the data from the situation analysis.

The following five areas are what Porter considered the forces of the competitive market:

• Supplier power
• Buyer power
• Competitive rivalry
• Threat of Substitution
• The threat of new entry

The 5C’s analysis is another very used tool template for situational analysis. It is a technique that helps give an overall view of the company's situation.

It is very similar to the SWOT template but used as a framework. It is one of the greatest marketing tools to tell a business’ health.

Company

The first step when doing this kind of situational analysis is to look at your own company. Take a deep look at the current state of it, financially and operationally.

This first step is the SWOT analysis previously mentioned. It helps create a deep analysis of the first C, making it even easier to fill the next ones in the situation analysis template.

Collaborators

This is where you evaluate your collaborators as investors and take note of the most important ones. They are the opposite of competitors, and your prosperity is also their prosperity.

These relationships can become business partnerships and generate even more customers and profit.

Customers

This is a vital part when doing situational analysis. Here you will hear your customers and understand their needs, problems, and situation.

By doing this, you will know what and how to sell. This knowledge will be the key to better communication. The research on how to do this can be done in a dozen different ways.

Competitors

When it comes to external forces, the competitors can be the most expressive ones, depending on your market. Paying attention to their weaknesses is the key to having a better position in the market and becoming the customers’ favorite.

Be careful because, sometimes, when doing a situational analysis template, these competitors may not be very clear. The competition does not have to be direct. Having a similar product or another solution for the same problem can also be a competition so consider that when doing the 5Cs.

Climate

The last item on this situational analysis method is equivalent to the environment topic of your PESTEL analysis. It refers to the market where your company is inserted.

Having a good evaluation of the climate is crucial to understand the next steps of your business. This will have a direct impact on how your business works and who you are selling to.

Along with the PESTEL and other tools, many factors must also be considered in your situation analysis template to make the market research more effective, making the future goals of your business even easier to reach. The more detailed your situation analysis template gets, the best for your company.

This ends up increasing your internal capacities and helps in prospecting for new customers and increasing external opportunities, achieving a bigger market share, for example. Some of the most important company analysis topics that you should include in your SWOT analysis templates are:

One of the key features of a successful business is its distribution and production process. The distribution analysis deals with many aspects that sometimes go far beyond the company itself. This happens when your product or service is sold by third parties, like a supermarket, for example.

A deep understanding of the distribution channel can be a big deal when it comes to spending more resources just to achieve the clients. This makes your products get more expensive and lose space to the competition.

Another thing to consider when doing this part of the SWOT analysis is the product production process. Sometimes doing just one thing the wrong way can cause a production chain to lose half of its potential, and situational analysis can help avoid that.

Another vital item to include in your SWOT template is a deep analysis of both your internal strengths and weaknesses. Having a better understanding of what gets you ahead of the competition and what your team could do better is one of the most important steps when deciding your next strategy.

Working on those weaknesses and making your strengths even better can be a really hard task since it demands cooperation from the entire company, internal and external. When you achieve this objective, you will certainly hold your position in the market even easier.

When it comes to effectively writing a situational analysis, no matter if it’s following the 5Cs method or a traditional SWOT analysis, the best tool for doing it is Microsoft Office. The software provides a huge variety of tools for you to take note of whatever you may need for your business analysis template and also can be personalized to fit any design or layout you may want.

Another reason for choosing Word is because the Office package provides lots of other software that are market standards for indispensable tasks. This software is a must-have for any business of any kind.

By using Word, you guarantee that your analysis will be accessible to anyone that needs it. Along with that comes the integration with the other applications, making every task more optimized and easy.

Get this template 

Get this template 

Get this template 

To use all of Microsoft Office’s features, you will need an activation key. You can get one by accessing RoyalCDKeys and buying it for a considerably cheaper price when compared to Microsoft’s official website.

By doing it, you end up saving a huge amount of money that can be used in the situation analysis of your business, for example. This way, you can have all of its features by paying less than half of the price.

Now that you know everything you need in order to make the perfect situation analysis template for your business, it’s time to start writing it. Don’t forget to take the proper time to look at the aforementioned aspects.

There are many different methods for doing this kind of procedure, and you are the only one who can tell which works better for your company. Be sure to make your analysis clear and objective, so anyone in your team can understand.