In the framework of developing next generation safety analysis tools, Canadian Nuclear Laboratories (CNL) has planned to incorporate subchannel analysis capability into its advanced system thermalhydraulic code CATHENA 4. This paper provides a literature review and an assessment of current subchannel codes. It also evaluates three code-development methods: (i) static coupling of CATHENA 4 with the subchannel code ASSERT-PV, (ii) dynamic coupling of the two codes, and (iii) fully implicit implementation for a new, standalone CATHENA 4 version with subchannel capability. Results of the review and assessment suggest that the current ASSERT-PV modules can be used as the base for the fully implicit implementation of subchannel capability in CATHENA 4, and that this option may be the most cost-effective in the long run, resulting in savings in user application and maintenance costs. In addition, improved versatility of the tool could be accomplished by the addition of new features that could be added as part of its development. The new features would improve the capabilities of the existing subchannel code in handling low, reverse, and stagnant flows often encountered in system thermalhydraulic analysis. Therefore, the method of fully implicit implementation is preliminarily recommended for further exploration. A feasibility study will be performed in an attempt to extend the present work into a preliminary development plan.