What is Situational Analysis?

You can’t make good decisions without knowing stuff. It’s a simple statement. Nothing elaborate here. Its simplicity doesn’t invalidate its truth, though.

As a consultancy, how can we, or anyone, suggest or propose a marketing direction for an organisation if we don’t understand what they do, the environment they operate in and who their audiences are? If we don’t know stuff, how can we say anything with any confidence?

And that’s what it’s all about, really. When an organisation comes to NeonLogic they have a problem or a need. That may be attracting candidates, promoting a product, launching or refining a brand, lead gen or any other marketing requirement in today’s complex mix. We are tasked to solve that problem in the arena of marketing and communications.

Discovery

Of course, we have our own methodology. Its first step is Discover. This is a catch-all for research and understanding. We have embedded it into our culture for the very reasons noted above. What does it mean, though? It’s all very well to say, ‘we’ll do some research.’ Where do we start? Is there more of a craft to it than that?

A Situational Analysis

There are lots of strategic frameworks out there. They can be mixed together or applied depending on the situation. For research, a valuable exercise is the Situational Analysis. You may find it outlined as the first step in the SOSTAC marketing plan model, but it’s certainly not restricted to just that. A Situational Analysis is a review of the current organisational state, competitors and various things that are happening in the marketplace.

A situational analysis brings a number of benefits:

• Defines audiences
• Understands competitors
• Identifies opportunities and threats.

The backbone of the Situational Analysis are the 5Cs. These are:

Company 

This is where we try to understand who the organisation is, what are its objectives, its products, brand equity and what is unique about its offering. We use tactics such as reviewing current marketing activity and assets, workshops, SWOT Analysis, interviews and desk based research.

Competitors 

Who do we see as competitors in the marketplace, and who are best of breed examples? At this stage, we need to assess how they position themselves, how their products and marketing strategies differ and what is working for them. We review their marketing activity, cross-reference their product suite and measure their value proposition and activities against our own.

Customers (or audiences) 

This is perhaps one of the most crucial. We need to understand who they are, their market size, segments, what channels they spend their time with, what are their concerns and worries, buying power, or perceptions about the organisation. There are a number of market research tools we can access here, as well as reviewing current marketing response activity, such as Google Analytics or social listening. Customer Surveys are often a simple, but invaluable method to gather both qualitative and quantitative data. A valuable exercise in this stage is developing audience personas and segments. These begin to give a clear breakdown of certain groups of audiences. They can be refined over time and used as a sense check against marketing activity.

Collaborators 

This group is a mix of other entities an organisation may work with. They may be other businesses, suppliers or contractors. We need to know how they impact the organisation and if there are any further opportunities in the relationship. A matrix can be used to understand these.

Climate

Finally, there is the climate. Markets changes. Trends are trends. What is a must-have today, tomorrow is merely a fancy. At this stage, we need to understand the wider environment the organisation operates within. This can cover a range of topics from the economy, legal restrictions, social change and politics. Simple examples here are the recent global events impacting the talent market, or the shift in behaviour as people work more from home. There really is no quick approach on this one. Good general knowledge is key, but so too is a will to go out and acquire research and reports. It can also be the most fascinating. It’s very easy to find oneself learning all about a small piece of government legislation or a new technological development.

Bringing It Together

It can seem overwhelming when faced with all the gathered research. The first step is organising it – though often this happens along the way. Mind Maps and a matrix can offer easy to navigate structures as well as space to expand thinking. The next task is to assess the research. At this stage we’re looking for insights, to tie that data into knowledge that can shape a piece of communications or marketing. We are interrogating what we have discovered. Often this can open up more questions, so we may need to go back to clarify, test or expand on a topic. Learning doesn’t stop.

The Situational Analysis is a framework to get to that point. It’s not an end in itself, but is the groundwork for strategy. It enables an understanding of the core elements that impact an organisation. It’s how we get to learn stuff. It’s how we make good decisions.

Further topics: The Situational Analysis can be expanded or include a range of approaches. These may include a SWOT Analysis, PESTLE Analysis or Porter’s Five Forces. But these are subjects for another day! And perhaps another blog.