Internal Analysis

Internal Analysis

( Evaluate the strength and the weaknesses within the company)

Four Major Functional Areas That Should be Evaluate

 

 Consist of  five basic functions which is PLANNING (establish vision, mission, objectives, strategies, policies and forecasting), ORGANIZING (determine or delegate the job scope, job descriptions or authority of the employees), MOTIVATING (motivate the workers to be more efficient in their work by rewards, advice or praise), STAFFING (recruiting and training the staff according to what the company most needed) and CONTROLLING (evaluating or measuring the companies workers actual performances).

The most use formula in marketing is 4Ps which means PRODUCT (what products should the company offer), PRICE (how much should the company sell the products, the company should consider the customer buying pattern and their own profit), PLACE (where the company want to distribute the products by considering the folks demand of the products) and PROMOTION ( how the company attract the customer to buy the products).

The company should measure/manage their liquidity ratio (the firm’s ability to meet its maturing short-term obligations), leverage ratio (the extent to which the firm has been financed by debt), activity ratio (how effectively the firm uses its resources), profitability ratio (measures the management’s overall effectiveness as shown by the returns generated on sales and investment) and the growth ratio (the firm’s ability to maintain its economic position in the growth of the economy and industry).

 

Operations means the process of transforming the input to the output that are of the higher value to the buyer. Break-even analysis (BEP) is frequently use in analyzing the link between production and finance.

8 Steps in Evaluating the Company Strengths and Weaknesses

List all the internal factors in the company

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Assign an important score to each of the internal factors (1-10)

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Determine the weighted average of the internal factors (Important score/Sum of important score)

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Assign the capability score to each of the internal factors (1-10)

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Determine the weighted capability ((Weighted average x Capability score)/Sum of the important score)

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Select 5 factors with highest score of weighted capability (STRENGTHS) 

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Determine the difference gap between the importance score and the capability score for the internal factors that are left to be chosen (those factors with low scores of weighted capability)

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Select 5 factors with largest positive difference gap (WEAKNESSES)