Internal analysis: A review of an organization’s strengths and weaknesses that focuses on those factors within its domain. It is the procedure of identifying the assets and obstacles that define your company’s potential and limitations. A detailed internal analysis will typically give a business a good sense of its basic competencies and the desired improvements that it can make to help meet the requirements of potential customers within its intended market. It is an exploration of your organization’s competency, cost position and competitive viability in the marketplace.
In order for the strategic management process to begin, managers are required to conduct an internal analysis. This involves identifying the business’ strengths and weaknesses, by analyzing its competencies. The data generated by an internal analysis is important because you can use it to develop strategic planning objectives to sustain and grow your business. It also involves managers highlighting the business’ competitive advantage. For strategies to be effective, the organization must exploit and expand on its strengths, as well as reduce or eliminate its weaknesses; thus furthering its competitive advantage, in order to achieve profitability.
