Business Problem-Solving and Strategy

1The Essentials of Situation Analysis

Analyzing the Situation Is The First Step in Building a Strategy

As explained in the prologue, the most important point in building a strategy is the present. This means having a clear and accurate grasp of the current situation surrounding the company, industry, and everything around it. When building a strategy, you must select the target market and decide how and where to allocate your limited resources in order to create an edge over your competition. Your strategy is a culmination of multiple decisions, which you can't do without an accurate understanding of the current situation.

However, in analyzing the situation, you need to not only think about the present but also work on your prediction for the future. Your strategy will soon turn obsolete if you focus too much on the future, especially in the current ever‐changing market. Keep in mind to observe the external factors closely in order to foresee the future. You'll end up with an invalid strategy if the situation analysis you base it on is inaccurate. This is why situation analysis is such an important task.

Only a Handful of Corporations Truly Understand the Current Situation ...