Situation Analysis & Internal External Analysis
After developing its mission, a firm next must perform a situation analysis, using a
SWOT analysis that assesses both the internal environment with regard to its strengths
and weaknesses (internal analysis) and the external environment in terms of its
opportunities and threats (external analysis).
Situation analysis also includes an examination of market trends, customer analysis,
and competitive analysis.
A SWOT analysis is designed to help the firm determine areas in which it is strong and
can compete effectively and areas where it is weak and vulnerable to competitive
It also enables the firm to understand where it has sustainable competitive advantage
or unique advantages that cannot be easily copied by competitors and how it can
leverage those advantages in response to new opportunities arising from changes in
its external environment.
By understanding its competitive s