Situational Analysis is a strategic tool used to assess the current environment of an organization or project. It involves examining internal factors, such as strengths and weaknesses, alongside external factors like opportunities and threats. This analysis helps in understanding the context in which an organization operates, guiding decision-making and strategy development. The process often includes frameworks like SWOT Analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats. By identifying these elements, organizations can better align their resources and capabilities with market demands, ultimately enhancing their effectiveness and competitiveness in their respective fields.