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3everything together and succinctly tell clients what the real problem is. Student-analysts especially,because they are not firm insiders, have a tendency to want to avoid answering this big, oftenunpleasant, question. They are tempted to try and dodge the real issue by either presenting “laundrylists” of problems or solutions, by presenting a mass of different undigested strategic planningtechniques, or by providing no comprehensible structure — the proverbial “dog’s dinner”. The fulcrum requires a short statement of what will happen if the firm continues in its currentstrategy, combined with a brief explanation about why. These statements may be no longer than afew sentences, because the fulcrum mostly summarizes information that has already been analyzed inthe current situation analysis. (If the analyst ends up with a fulcrum assessment that is not “signaled”in the current situation analysis, the current situation analysis needs revisiting and reworking.)Each of the three parts can be divided into specific components. Figure 1 summarizes all ofthe major components of strategic analysis as a flowchart as well as showing where these componentsfit into the three major parts of the analysis. This paper expands on each of these components inturn.FIGURE 1 ABOUT HEREThe Logic of the Current Situation AnalysisA description of the issue/problem comes first (i.e., on the left side) because this material provides acontext for any strategic analysis and should be understood first. The basic descriptors of the focalfirm come next. Even though current managers of the focal firm will be familiar with thisinformation, future managers and employees may not be. Either industry analysis or internalcharacteristics analysis can come next. This is followed by a description of current strategy and,finally, financial performance. One might argue that financial performance analysis should be thefirst component of current assessment analysis rather than the last component of current situationanalysis. We place it within current situation analysis because, at this point, the financial assessment isprimarily descriptive. The position of the components of current analysis on this diagram and the lines betweenthem emphasizes that the major components of current situation analysis are jointly determined:strategy affects structure and other internal characteristics (and vice versa), strategy can, in some4circumstances, affect the industry structure and other aspects of the competitive environment (andvice versa), strategy affects performance (and vice versa), etc. The focus here is on the main elementsof the current situation at the current time (“time t”). The causal relationships among the elementscome together in fulcrum assessment analysis and in solution analysis