Internal Environment

Hai.. This week we have learnt about internal environment. Among them are..

SWOT analysis

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

·         Strengths: characteristics of the business or project that give it an advantage over others

·  Weaknesses: characteristics that place the team at a disadvantage relative to others

·     Opportunities: elements that the project could exploit to its advantage

·        Threats: elements in the environment that could cause trouble for the business or project

Identification of SWOTs is important because they can inform later steps in planning to achieve the objective.

SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. The factors come from within a company's unique value chain. SWOT analysis groups key pieces of information into two main categories:

1.   internal factors – the strengths and weaknesses internal to the organization

2.   external factors – the opportunities and threats presented by the environment external to the organization

Analysis may view the internal factors as strengths or as weaknesses depending upon their effect on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses (distractions, competition) for another objective.

Value Chain

A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter.

"The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organisation as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits."