Situational Analysis
In this unit's Readings, researchers such as Narver and Slater (1990) and Kohli and Jaworski (1990) make a strong case that in order for an organisation to be profitable, marketing and business strategies need to be viewed as interlocking rather than separate. In order to determine whether organisations have this synergistic relationship, it is important to understand the concept of marketing orientation. Kohli and Jaworski (1990) concluded that market orientation is the gathering of, dissemination of and responsiveness to market intelligence, but that profitability is not necessarily a central goal or component.
These findings would surprise most business executives, who most likely view their marketing efforts as directed at bringing in a profit. Indeed, most organisations must be profitable in order to survive. However, it is vital to integrate marketing and business strategies to focus on market orientation rather than on profitability. But how does an organisation begin to formulate marketing efforts that will align with its business strategy? One way is by performing a situational analysis. A situational analysis provides a baseline for where an organisation is in its journey toward such alignment. In fact, a situational analysis goes back to Kohli and Jaworski's (1990) gathering of market intelligence.
A situational analysis allows an organisation to understand its external and internal health, which may entail its customers, the market environment, competition and other areas. No one definitive situational analysis type or tool is recommended; instead, an online search will yield various types and frameworks that will inform your understanding. One that has become popular is the 5 C Analysis, which is an environmental scan on five key areas related to marketing decision making (Winn, 2011): company, customers, competitors, collaborators and climate.
Another common framework used for situational analysis in business (not only for marketing applications) is the PESTEL, which stands for environmental influences including political, economic, social, technological, environmental and legal. This type of analysis has been known in several different iterations (PEST, SLEPT, STEEPLE, EPISTEL), with slight variations in terminology and focus. You will be exploring these types of analyses more in-depth in Unit 5. For this unit's Individual Assignment you will conduct a more informal situational analysis in which you will analyse an organisation's overall marketing and business strategies and assess how well they appear to be aligned.