Question

Need help with elaborating on the following discussion question. I responded earlier and my professor wants a more detailed response and I am having difficulty doing so. Please see the following:

• Discuss the differences between an internal analysis and an external analysis with respect to strategic planning.
• What do organizations typically analyze as part of an internal analysis, and why?
• What do organizations typically analyze as part of an external analysis, and why?
• How do the results of each of these analyses inform an organization’s strategic plan?

Answer 1

Internal analysis includes analyzing the firms internal capabilities, employee capacity, productivity, skill set analysis, process stability, process capability, etc. While external analysis includes understanding the market conditions, competitor analysis, supplier-demand analysis, environmental factors, legal and political factors, etc.

Organizations typically study internal strengths and weaknesses of the organization and it's employees. This helps the organization ascertain where it is rich in resources and where it is lagging behind. Thereby, use the strengths to gain a competitive advantage while ensuring weaknesses do not cause the organization an added disadvantage.

For the external analysis, organizations typically analyse opportunities and threats existing in the surrounding market. This helps in effective forecasting and designing a risk management and mitigation plan. Thus, the organization gains the benefit of being at a competitive edge i.e. able to capitalize on the opportunities and avert the threats or risks.

The internal and external analysis help in effective strategic planning by ensuring successful execution of projects and improving the processes to match the changing requirements of the market and business. Thereby, achieving business growth and rise in customer satisfaction.