TABLE OF CONTENTS
Internal Environment 2
SWOT Analysis in the Internal Environment 2
SWOT is an acronym used to describe the internal Strengths and Weaknesses of the firm and the environmental Opportunities and Threats. By description, Strengths (S) and Weaknesses (W) are considered to be factors within the control of the firm. Opportunities (O) and Threats (T) are external factors over which the firm has essentially no control.
It is the most prominent tool for assessing and analyzing the overall strategic position of the ...view middle of the document...
These factors combined determine what the organization is trying to accomplish and how successful it is likely to be. The internal environment must be assessed before a strategy can be formulated.
SWOT Analysis in the Internal Environment
SWOT analysis provides a logical framework for assessing and understanding the firm’s internal environment. It also provides a comprehensive evaluation of the internal environment’s potential strengths and weaknesses and matches them against the threats and opportunities posed by the external environment in which the firm operates. The best decision of a strategy is one that maximizes the firm’s internal strengths and opportunities and minimizes its weaknesses and threats.
The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its customers. Any analysis of company strengths should be customer focused because strengths are only meaningful when they assist the firm in meeting customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy. These weaknesses should be examined from a customer perspective because customers often perceive weaknesses that a company cannot see.
Subsequently, below we explore detailed analysis of the SWOT model and how it assists in assessing the internal environment and also how they affect internal decision making process of the firm.
A Strength is a resource controlled by or is available to a firm that gives it an advantage relative to its competitors in meeting the needs of its customers. In order to compete successfully in the industry, a company needs to understand capacity to outdo the industry heavy weights. These internal strengths include market share, company reputation, financial capabilities, company image, strategic alliance and networking.
A company’s strengths are usually easy to identify, through continued dialogue with customers and suppliers. The company records (e.g. sales) will also help to indicate areas where a firm is particularly strong (e.g. rising sales for a particular product
The company’s market share for instance is a strength. It helps companies to clearly see which marketing investments work, which don't, and how budgets can be most effectively deployed. It helps a company identify its customers and helps the firm device a strategy to maintain or improve the quality of its products to its customers. Through SWOT, the firm’s reputation can be evaluated and its impact on performance assessed. A competitor will take advantage and capture the firm’s market share if the reputation is not cleaned. A company with a long term strategic perspective needs to analyze its internal strengths and device a mechanism on how use them as an arsenal to fight...