5C situation analysis

Situation analysis is principally a marketing strategy tool, although its scope extends into broader strategic work.

When to use it

Consider using this method as an alternative to issue analysis (Issue analysis (Minto)) when you already know how it works. Each approach begins by surfacing ideas and issues through brainstorming, an essential early activity in strategy development.

Origins

The 5C framework developed incrementally from the earlier 3C form of situation analysis, which concentrated on the company, customers, and competitors. Marketing practitioners subsequently added collaborators and the wider climate or context to produce a more complete scan of the operating environment. Because the framework evolved through teaching and practice, it is not reliably attributable to a single inventor. Alexander Chernev later gave the five-part structure a prominent textbook treatment in Strategic Marketing Management.

What it is

Albert Einstein once reflected on the strangeness of humanity's situation on Earth. The relevant question here is: what characterizes the situation surrounding your firm?

One widely used version is the 5C analysis, illustrated below. It scans the organization's environment across five areas:

Company – goals, culture, product portfolio, strengths, weaknesses, unique selling proposition, price position, and market image

Collaborators – suppliers, alliance partners, and distributors

Customers – customer groups, market size and growth, segments, sought benefits, channels, purchasing decisions, and customer behavior

Competitors – direct and indirect rivals, potential entrants, substitutes, market shares, entry barriers, relative positions, strengths, and weaknesses

Context – the political, economic, social, technological, environmental, and legal setting, also examined through PESTEL analysis in related items in this collection.