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Strategic Management - Environmental Analysis and Diagnosis

Internal analysis – Definition

   Posted On :  26.06.2018 12:59 am

Lawrence R. Jauch and William F. Gleuck define Internal analysis and Internal diagnosis in following words:

Internal analysis – Definition
 
Lawrence R. Jauch and William F. Gleuck define Internal analysis and Internal diagnosis in following words:
 
“Internal analysis is the process by which the strategists examine the firm’s marketing and distribution, research and development, production and operations, corporate resources and personnel, finance and accounting factors to determine where the firm has significant strengths and weaknesses. Internal diagnosis is the process by which strategists determine how to exploit the opportunities and meet the threats the environment is presenting by using strength and repairing weakness in order to build sustainable competitive advantage.”
 
Internal analysis is the process of reviewing organizational resources (resource audit), scanning organizational activities and linking them with creation of value to the organization (value chain analysis) and identifying the unique strengths and capabilities (core competences).
 
As is obvious from the above words, that the internal analysis involves three steps as shown in Figure 7-1:
 
1. Resource Audit.
 
2. Value Chain Analysis
 
3. Core-competence Identification. 


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