5.7. Internal Analysis

In order to make the right decision about the company strategy, it is necessary to objectively map out (assess) the company’s own internal resources, options, and also shortcomings. The purpose of this is to assess whether the company has or is able to provide the necessary resources, prior to setting the strategy. This applies not only to finances, human resources etc., but also predominantly non-financial resources such as expertise, contacts, relationships etc. This is the aim of the internal analysis, which suggests always conducting assessments using the same pattern (see Strategy Contents), on the basis of which the strategy will then be defined (Keřkovský, Vykypěl, 2006).

Specifically:

• If the company implements strategic analysis in order to decide on its generic (corporate) or business strategy, it is best to implement internal analysis using the 7P approach – i.e. to map out the company’s current condition in terms of products, prices, promotion, distribution, human resources, planning and processes.

• If the company implements strategic analysis with the intention of e.g. defining certain functional strategies (for example, strategies for marketing, finance, production, purchasing, IS/IT, human resources etc.), it is best to analyse sub-strategic aspects of the given functional strategy  – see also the Marketing Strategy, Purchasing Strategy, Production Strategy, Financial Strategy and HR Strategy.

It then holds true that the internal analysis should include an analysis of the strengths and weaknesses of all sub-strategic aspects as they are defined in chapter 4.

Sub-aspects of the Internal Analysis Used for Formulating a Business Strategy and Functional Marketing Strategy