Internal & External analysis

Respond to the following in a minimum of 175 words:

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

Internal and External Analysis

Proper strategic planning promotes the success of the company by analyzing the internal and external prospects. The internal analysis explores the competitiveness of the company, its financial position, and company resources, including human resources (Bryson et al., 2018). By analyzing such internal components of the organization, certain decision-making and strategic planning can be made. The analysis looks into the organization’s strengths, weaknesses, opportunities, and threats. According to Bryson et al. (2018), the information obtained after conducting the SWOT analysis is incorporated with the strategic planning of the organization. It helps identify any loopholes and opportunities in the organization and taking advantage of them. The financial position of the organization determines the route the strategic planning will take. If the organization is under an economic strain, strategic planning will be developed according to its economic range and freedom.

On the other hand, the external analysis of an organization deals with the Opportunities and Threats of the SWOT analysis (Bryson et al, 2018). An organization conducts a market survey to help evaluate various opportunities that might be present. The opportunities may be in the form of a rival company going out of business or even capitalizing on its weakness. Threats mainly comprise competition and government policies that may not favor the performance of the organization. Therefore, when developing a strategic plan, the company looks at the opportunities present on the market and develops a plan of action to help take advantage of the situation. It also takes the threats into consideration and strategies on how they can best maneuver them without any financial implications.

References

Bryson, J. M., Edwards, L. H., & Van Slyke, D. M. (2018). Getting strategic about strategic planning research.