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Creating a 5C Situation Analysis

A first step to satisfying customer needs is to understand your internal and external situation. To do so, consider a 5C analysis. 5C refers to an evaluation of your company, collaborators, customers, competitors, and climate. This analysis is outlined below.

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COMPANY

What does your business do? What are you selling? What are your strengths and weaknesses? What unique position do your have in the marketplace? How do people think of your company? Where do you want to be in the future?

  • Product line
  • Image in the market
  • Technology and experience
  • Culture
  • Goals

COLLABORATORS

What partners are you currently working with? Who are your suppliers? Who are you working with to run your operation? Who provides you with shipping? Processing credit cards? Web shopping cart? Who handles your inventory/warehouse operations?

Your collaborators are key to your efficiency and bottom line. Take a look at each to see how you can improve relationships and reduce costs. Do some research to see if there are more partners you can pull in or ways you can streamline.

  • Alliances
  • Suppliers
  • Distributors

CUSTOMERS

Who is your target audience? Who is currently purchasing from you? Why? Who do you want coming to your store? How do your customers behave? What is important to their purchasing decision? What type of people are buying and not buying?

These questions are extremely important in guiding your communications strategy – once you know who you’re talking to and what they want to hear, you can effectively create content to spark their interest.

  • Market size and growth
  • Market segments
  • Benefits that customer is seeking, tangible and intangible.
  • Motivation behind purchase; value drivers, benefits vs. costs
  • Decision maker or decision-making unit
  • Retail channel - where does the customer actually purchase the product?
  • Customer information sources - where does the customer obtain information about the product?
  • Buying process; e.g. impulse or careful comparison
  • Frequency of purchase, seasonal factors
  • Quantity purchased at a time
  • Trends - how customer needs and preferences change over time

COMPETITORS

Who are your primary competitors? Are there any substitutes for your products? Are there any emerging businesses that might impact you? What are their strengths and weaknesses? How do customers think of other companies?

Answering these questions allows you to position your brand. In other words, you can identify your uniqueness and leverage that as a sales tool. Additionally, you’re better aware of what others are doing and can make adjustments to your business plan.

  • Actual or potential
  • Direct or indirect
  • Products
  • Positioning
  • Market shares
  • Strengths and weaknesses of competitors

CLIMATE

What’s going on in the industry? Are there new technologies or trends that will impact you? Are there any new laws or regulations in the works you need to know of? How is the current economic situation affecting customers’ buying behavior?

This analysis point is much like the opportunities and threats section of your SWOT analysis – a way to gauge your external environment. Again, study the level of control you have over each and then create a plan on how to address potential changes in business climate.

The analysis of the these four external "climate" factors is referred to as a PEST analysis. The climate or macro-environmental factors are:

  • Political and regulatory environment: Governmental policies and regulations that affect your market
  • Economic environment: Business cycle, inflation rate, interest rates, and other macroeconomic issues
  • Social and cultural environment: Society's trends and fashions
  • Technological environment: Knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products

           


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