Situation Analysis

THE SITUATION ANALYSIS
The Situation Analysis provides important information that’ll help you make good management decisions. It outlines your current product portfolio, the market you are in and helps you see future potential. It starts by looking at current and future market demands. Next, it reviews your company’s and the overall industry’s production capacity. It concludes by examining your profitability and your product offerings. A Perceptual Map is a simple way to chart w hat customers want in terms of a product’s size: its weight and dimensions...and performance: its speed and accuracy.
Customers are concentrated into market segments....These segments are represented by the circles on the map.
The first part of the Perceptual
Map exercise shows how the needs of customers change. Each year, customers demand smaller, faster products. This makes the circles move on the map. We call this
“Segment Drift.”
The second part describes a position within the circle called the “Ideal Spot.
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Products with coordinates that are near the ideal spot attract more attention than those that aren’t.
This Perceptual Map exercise will give you an accurate prediction for the location of each segment’s ideal spot for the next several years.
The Demand Analysis estimates market growth.
You can use the Demand Analysis as you work on sales forecasts.
While you can calculate the demand for the upcoming year, growth rates in future years are unknown.
Planners address this uncertainty with scenarios: worst case, average case and best case.
The average case assumes that the current growth continues into the future.
The Demand Analysis uses the average case.
The Demand Analysis is an external measure that looks at the number of units the market will want.
The third exercise, the Capacity Analysis, looks internally to see how many units your company can supply.