5. SITUATION AUDITAccording to Webfinance (2015), situation audit is the process of identifying and evaluating existing internal and external elements that may impact an organization's ability to achieve its objectives. It helps the company to identify what is good and needs to improve also what is missing in the company that needs to change. Walters & Dana (2007) argue that “situation analysis is an objective look at the business environment and its marketing capability” (pp. 36). It involves a SWOT and environmental analysis, a competitive analysis and a marketing audit.6.1. Internal Analysis Managers are required to conduct an internal analysis to initiate the strategic management process. Internal analysis consists of determining the company's strengths and weaknesses by analyzing its skills. To have effective strategies, the organization must exploit and expand its strengths, as well as reduce or eliminate its weaknesses; thus promoting its competitive advantage, in order to achieve profitability (Hill & Jones, 2014). 6.1.1.