Situational Analysis

Situational Analysis – SWOT, product life cycle

situational analysis provides a precise understanding of a business’s current position and where it is heading.

SWOT (strengths, weaknesses, opportunities, threats) analyse provides the information to complete the situational analysis and assesses the business’s position compared with its competitors.

  • Strengths and Weaknesses: the factors that are developed and controlled from inside the business.
  • Opportunities and Threats: factors that are developed from the external business environment, meaning that the business has little control as to when or how these issues arise. Some

Product lifecycle: the stages a product passes through. Different marketing strategies are required at each stage.

  • Introduction or Establishment: slow sales, limited profit, difficult to gain market share and requires heavy promotion to increase consumer awareness and market share.
  • Growth: sales increase as business attracts a core group of customers, profits rise, high levels of promotion, competition grows.
  • Maturity: high competition, sales steady, limited opportunities for growth, profits may begin to decline.
  • Post-maturity: the final phase of the business lifecycle. The business enters either decline or renewal.
    • Decline: sales fall, negative profits, reduce promotion efforts, narrow distribution and eventual elimination.
    • Renewal: product revitalised with increased promotion, new promotional campaigns, brand altered.

Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.