Internal Analysis And Organizations example essay topic

INTRODUCTION In order to compete effectively in today!'s evolving global markets, industries and environments, an organization must not only be aware of its surroundings, it must also be aware of its internal structure. Organizations that invest their resources in conducting an internal analysis and organizations that continuously improve their products and services will be able to sustain global competition. Therefore, a company!'s commitment to evaluating the internal organization and constant quality improvement is essential. INTERNAL ANALYSIS What is Internal Analysis? Internal analysis is an evaluation tool utilized by an organization to formulate effectively business strategies based on the firm!'s strengths and weakness. An internal analysis for a business is similar to a personality assessment for a person.

Purpose The purpose for an organization to complete an internal analysis is! ^0 to understand the present strengths, weaknesses, capacities, resources and vulnerabilities, in relation to the external environment in which [the company] operates! +/- (Jester and Hussey, 2001, p. 11). These internal characteristics must be identified and understood for a firm to benefit from the knowledge gained after completion of an internal analysis. Function An internal analysis functions as a guide for management to develop and implement strategies that capitalize on the organization!'s unique strengths while lowering the risks of weaknesses. Knowledge attained through internal analysis assists management with strategic planning.

Definitions Several terms need to be defined to fully explain the internal analysis of an organization these include: strategy, strategic management, effective strategy, strategic goals, and distinctive competence. Griffin defines strategy as a! ^0 comprehensive plan for accomplishing an organization!'s goals! +/- (1996, p. 200). Bogue and Buff a state that strategy deals with managerial actions and decisions that have a continuing effect and enhance the long-term economic value of the business (1986).

Griffin also defines strategic management as! ^0 a way of approaching business opportunities and challenges, a comprehensive and ongoing management process aimed at formulating and implementing effective strategies! +/- (1996, p. 200). Griffin states that effective strategy promotes a superior arrangement between the organization and its environment for the achievement its strategic goals (1996). Top management sets strategic goals which are broad general issues for the organization (Griffin, 1996). Distinctive competence is something the organization does exceptionally well and its competitors cannot easily copy (Griffin, 1996).

Distinctive competence can also be referred to as core competencies or distinctive capabilities. Resources are the foundation for a firm!'s capabilities which are the source of its distinctive organizational capabilities. This framework provides a basis for sustainable competitive advantage which leads to the strategic competitiveness that can earn the firm above-average profits. A distinctive organizational capability, which adds to outstanding customer value, is hard for competitors to duplicate and can be utilized by the organization in a variety of ways (web). The following are examples of distinctive organizational capabilities that have given these firms sustainable competitive advantages (web).

1. Since the 1950's, one of the Sony Corporation's key capabilities has been miniaturization. Products include pocket-sized portable AM radios, Walkmans, Watchman's, and Disk mans. Sony has built whole lines of products based on miniaturization skills. 2. Intel's key capability is rapid product innovation.

Intel exceeds the competition as it develops succeeding generations of microprocessors. This allows Intel to use skimming prices for a short time, enjoying markups up to 80 percent. About the time its competitors are bringing their version of the chip to market, Intel suddenly cuts its prices. The competitors must cut their prices to compete, so the competition is never able to profit from the high margins that benefits Intel. 3. Honda's hallmarks of success are small engine design and rapid product innovation.

Honda utilizes these key capabilities from motorcycles to lawn mowers to small electric generators to automobiles (web).