Page 82 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management Hitesh Jhanji, Lovely Professional University

Notes Unit 5: Organisational Appraisal:
The Internal Assessment 1

CONTENTS
Objectives

Introduction
5.1 Importance of Internal Analysis

5.2 SWOT Analysis
5.2.1 Carrying out SWOT Analysis

5.2.2 Steps in SWOT Analysis
5.2.3 Critical Assessment of SWOT Analysis

5.2.4 Advantages and Limitations
5.3 Summary

5.4 Keywords
5.5 Self Assessment

5.6 Review Questions
5.7 Further Readings

Objectives

After studying this unit, you will be able to:

State the importance of internal analysis
Discuss SWOT analysis

Introduction

Internal analysis is also referred to as “internal appraisal”, “organisational audit”, “internal
corporate assessment” etc. Over the years, research has shown that the overall strengths and
weaknesses of a firm’s resources and capabilities are more important for a strategy than
environmental factors. Even where the industry was unattractive and generally unprofitable,
firms that came out with superior products enjoyed good profits.
Managers perform internal analysis to identify the strengths and weaknesses of a firm’s resources
and capabilities. The basic purpose is to build on the strengths and overcome the weaknesses in
order to avail of the opportunities and minimize the effects of threats. The ultimate aim is to
gain and sustain competitive advantage in the marketplace.

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