What does a situational analysis evaluate?

Prepare for the Management and Organization Module 6 (06-MGMT-ORG) – Strategy Exam. Engage with flashcards, multiple choice questions, hints, and explanations. Excel in your exam!

A situational analysis is a comprehensive assessment used in strategic planning that evaluates the Strengths, Weaknesses, Opportunities, and Threats (SWOT) related to an organization or its operating environment. This method provides a clear view of the internal and external factors that may impact a company's ability to achieve its objectives.

Strengths and weaknesses pertain to the internal capabilities and limitations of the organization, such as resources, processes, and culture. Opportunities and threats, on the other hand, deal with external factors, including market trends, competition, and regulatory environment. By analyzing these four aspects, organizations can identify strategic options that leverage their strengths, mitigate risks, and capitalize on opportunities in the market.

The other options, while important business considerations, do not encompass the full scope of a situational analysis. Opportunities and market positioning focuses narrowly on market aspects without considering internal capabilities. Financial resources and capital structure address only the financial aspect of an organization, lacking insights into market or operational dimensions. Human resources and talent acquisition concern the workforce strategy but do not address the broader strategic context that situational analysis provides.

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