Internal and External Analysis

Question 1

Why is Internal and External Analysis needed?

Answer 1

Environment is constantly changing, globalization -> challenges for companies to succeed in business. -> Every organization has a need for change and development. Pressure to emphasize knowledge and strengthen competitiveness -> have to make fundamental analysis of internal and external environment.

Question 2

External environment

Answer 2

External environment comprises of factors OUTSIDE the organization
External environment can create Opportunities and Threats for a company.

Internal and external environments have to meet each other in the way that the company can build a strategy that can lead to competitive advantage and above average earnings

Question 3

Internal environment

Answer 3

Internal environment contains factors that have influence on a companys RESOURCES. Internal environment focuses on the companys CAPABILITIES and CORE COMPETENCIES.

Internal and external environments have to meet each other in the way that the company can build a strategy that can lead to competitive advantage and above average earnings

Question 4

Internal Analysis

Answer 4

The Internal Analysis captures the specific parameters of the strategic business units and the entire organization through a strengths and weakness analysis

Question 5

ABC classiffication

Answer 5

The first, A, is the category for items that are outstandingly important, or business critical. The second, B, is the classification for items of average or middling importance. Finally, category C is the designation for relatively unimportant items. As a basis for a control scheme, each class ought to be handled in a different way. As you might have guessed, more attention will usually be devoted to category A items, with less to B and still less further to C.

Question 6

ABC analysis +

Answer 6

helps to focus decisions on business units with high economic importance, by:

• Reducing the concentration on points with minor importance.
• It helps to identify the most important economic business units in an organization
• It reduces the focus of the management of less important areas.

+ SIMPLE & TRANSPARENT

Question 7

The External Analysis

Answer 7

The External Analysis controls the relevant elements outside the organization like the:

1. Analysis of the ENVIRONMENT
   * Development of the global technology, economy, etc
   * Development of the demography, the culture of the home market, etc
2. Analysis of the global MARKETS
3. Analysis of the global BRANCHES
4. Analysis of the global COMPETITION