Situation Analysis

CMA CANADA PROFESSIONAL PROGRAMS

September 2012

Situational Analysis Tools

A thorough situational analysis will begin with an initial study of the business case in order to identify the current or implied mission, vision, strategic direction and strategic goals, as well as the preferences, needs, targets and constraints of significant stakeholders (e.g. shareholders, senior management, creditors, customers, suppliers, etc.). As well, the more obvious strengths and weaknesses, and a good cross-section of opportunities and threats (SWOT) can be identified and appropriately categorized. The initial scan should then be followed by a more careful study using some of the analytical tools mentioned below, in order to find the less obvious and often more pertinent strengths, weaknesses, opportunities and threats pertaining to the situation at hand. The final step will be to consider the comprehensive list of these factors that have been generated (reproduced in an exhibit to your report), and to focus on the most important and relevant items that a) have caused the current situation (weaknesses), or b) must be solved (weaknesses) or mitigated (threats) in order to rectify the current situation, or c) must be drawn upon in order to come to a viable resolution to the problem (opportunities and strengths). This final list will comprise the items that you will emphasize in the body of your report. SWOT Analysis A major starting point in solving a business problem is to take a close look at the environment within which an organization finds itself. One of the methods commonly used in such a situational analysis is “SWOT” (an acronym for Strengths, Weaknesses, Opportunities and Threats) which considers the strengths and weaknesses in the internal environment as well as the opportunities and threats in the external environment.

© 2012 The Society of Management Accountants of Canada. All rights reserved. ®/™ Registered Trade-Marks/Trade-Marks are owned by The Society of...