Strategic Management: Formulation and Implementation

The Areas That Most Businesses Should Analyze

An internal organizational analysis evaluates all relevant factors in an organization in order to determine its strengths and weaknesses. Some of the areas that most businesses should analyze include the following:

  1. Financial position. The financial position of a business plays a crucial role in determining what it can or cannot do in the future.
  2. Product position. For a business to be successful, it must be acutely aware of its product position in the marketplace.
  3. Marketing capability. Closely allied with an organization's product position is its marketing capabilities (i.e., its ability to deliver the right product at the right time at the right price).
  4. Research and development capability. Every organization must be concerned about its ability to develop new products.
  5. Organizational structure. Organizational structure can either help or hinder an organization in achieving its objectives.
  6. Human resources. All the activities of an organization are significantly influenced by the quality and quantity of its human resources.
  7. Condition of facilities and equipment. The condition of an organization's facilities and equipment can either enhance or hinder its competitiveness.
  8. Past objectives and strategies. In assessing its internal environment, every business should attempt to explicitly describe its past objectives and strategies.

Internal analysis is difficult and challenging. The checklists provided above can be helpful in determining specific strengths and weaknesses in the functional areas of business.