In strategic management, situation analysis (or situational analysis) refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. The situation analysis can include several methods of analysis such as the 5C analysis, SWOT analysis and Porter's five forces analysis. In marketing In marketing, a marketing plan is created to guide businesses on how to communicate the benefits of their products to the needs of potential customer. The situation analysis is the second step in the marketing plan and is a critical step in establishing a long term relationship with customers. The parts of a marketing plan are: Introduction Situation analysis Objectives Budgeting Strategy Execution Evaluation The situation analysis looks at both the macro-environmental factors that affect many firms within the environment and the micro-environmental factors that specifically affect the firm. The purpose of the situation analysis is to indicate to a company about the organizational and product position, as well as the overall survival of the business, within the environment. Companies must be able to summarize opportunities and problems within the environment so they can understand their capabilities within the market. 5C analysis While a situation analysis is often referred to as the "3C analysis", the extension to the 5C analysis has allowed businesses to gain more information on the internal, macro-environmental and micro-environmental factors within the environment. The 5C analysis is considered the most useful and common way to analyze the market environment, because of the extensive information it provides. Company The company analysis involves evaluation of the company's objectives, strategy, and capabilities. These indicate to an organization the strength of the business model, whether there are areas for improvement, and how well an organization fits the external environment. Goals and objectives: An analysis on the mission of the business, the industry of the business and the stated goals required to achieve the mission. Position: An analysis on the marketing strategy and the marketing mix. Performance: An analysis on how effective the business is achieving their stated mission and goals. Product line: An analysis on the products manufactured by the business and how successful it is in the market. Competitors The competitor analysis takes into consideration the competitors position within the industry and the potential threat it may pose to other businesses. The main purpose of the competitor analysis is for businesses to