The term situation analysis is defined as a process of assessing the current situation facing the organisation


The term situation analysis is defined as a process of assessing the current situation facing the organisation, arriving at a set of assumptions about future, identifying key strategic issues which are likely to confront an organisation. (Reed, Peter, 2014, p. 65). It therefore commences with a review of the external environment in which there are forces that can be described as being remote or macro-environment which eventually comprises of economic, socio-cultural, climate change, technology and also demographical conditions.
The remote environment or the macro-environment can be classified as those forces which have an impact on the society as a whole including the industry and also the marketplace where the organisation operates within. (Reed, Peter, 2014, p. 65). This type of an environment comprises of forces which are mentioned above which has the potential to bring about change in the nature, shape and size of the market and the market, and the marketplace where an organisation competes in.
Simultaneously on the other hand there are considered to be forces which are therefore comprises of suppliers, clients, staff, market demand and supply which can be classified as near environment. (Reed, Peter, 2014, p. 65). The review of the near environment consists of market demand, attractiveness of the market, competitive landscape, distribution structure, end-consumer buying behaviour, preferences and the supply of the industry. (Reed, Peter, 2014, p. 65). When talking about near environment review it can be said that market demand and attractiveness are the major components of such type of a review.