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Leverage our strategic planning software to build your plan faster than Excel or Word. Make the year it happens! SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company.

The SWOT analysis framework has gained widespread acceptance because of its simplicity and power in developing strategy. Just like any planning tool, a SWOT analysis is only as good as the information that makes it up. Assess your market: What is happening externally and internally that will affect our company? Who are our customers?

Lecture 3. External Analysis

What are the strengths and weaknesses of each competitor? Think Competitive Advantage What are the driving forces behind sales trends? What are important and potentially important markets? What is happening in the world that might affect our company? What does it take to be successful in this market? List the strengths all companies need to compete successfully in this market. Assess your company: What do we do best?

What are our company resources — assets, intellectual property, and people? What are our company capabilities functions?

Analyzing the External Environment

Assess your competition: How are we different from the competition? What are the general market conditions of our business? What needs are there for our products and services? What are the customer-market-technology opportunities? An evaluation needs to be completed drawing conclusions about how the opportunities and threats may affect the firm.

Competitor analysis is a critical aspect of this step. 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 target markets.

Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see. Being market focused when analyzing strengths and weaknesses does not mean that non-market oriented strengths and weaknesses should be forgotten. Rather, it suggests that all firms should tie their strengths and weaknesses to customer requirements.

Only those strengths that relate to satisfying a customer need should be considered true core competencies. Both opportunities and threats are independent from the organization. If yes, it is an issue that is external to the organization. Opportunities must be acted on if the organization wants to benefit from them.

Threats are barriers presented to an organization that prevent them from reaching their desired objectives. Also, when executing this analysis it is important to understand how these elements work together.


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When an organization matches internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers. In addition, an organization should act to convert internal weaknesses into strengths and external threats into opportunities. Focus on your strengths. Shore up your weaknesses. Capitalize on your opportunities. Recognize your threats.

Purpose of Environmental Analysis

Size and Growth: What are important and potentially important markets? Thirdly, evaluate the external sales environment, including customer and competition analysis. Fourthly, forecasting the future external scenario. Fifth, analysing the existing sales operations, and evaluating it through gaps, key successful factors, and SWOT analysis. Finally, we gave.

It is also one of the top major airlines dominating the Domestic Airlines industry. Another issue affecting companies is the role business. I have chosen this area to focus on because as Palmer and Hartley point out, it is one area that is forcing immense change in the external business environment. I will be researching and …show more content…. Investment in technology and innovation is frequently seen as a key to the success of an enterprise and has been used to explain differences in the relative competitiveness of different countries.

Technological changes over the last ten years have transformed many business activities and created entirely new ones. Some of the major changes have been in I. T information technology which has affected many every day business activates.

Administration is one area that has been transformed by developments in I. Due to the drop in cost of computers and the increased use of e-mail as the primary form of communication; many businesses now have networked computers to enable better internal and external communication. Businesses are also able to store data in electric format rather than on paper saving both space and allowing easy access to information.

Analysis of the External Environment of Business 1

This information serves as input to a forecast of the impact of each environmental factor on the business. For instance, a company might project the volume of products likely to be sold in a country in light of existing poor economic conditions and significant trade barriers. An environmental analysis reviews current environmental conditions to forecast a future business environment.

The static nature of the analysis ensures that unexpected environmental changes are not considered in a company's business projections. In addition, the environmental analysis is but one source of information that's evaluated as a company develops a strategic plan. As a result, the analysis does not guarantee business success. The benefit of the analysis is also limited by the reliability and timeliness of data used in the analysis. Billie Nordmeyer works as a consultant advising small businesses and Fortune companies on performance improvement initiatives, as well as SAP software selection and implementation.

During her career, she has published business and technology-based articles and texts. Nordmeyer holds a Bachelor of Science in accounting, a Master of Arts in international management and a Master of Business Administration in finance. Difference Between Industry and Market Analysis. Share on Facebook.