Question

Respond to the following in a minimum of 175 words: Discuss the differences between an internal analysis and an external analysis with respect to strategic planning. What do organizations typically analyze as part of an internal analysis, and why? What do organizations typically analyze as part of an external analysis, and why? How do the results of each of these analyses inform an organization’s strategic plan? Provide either a personal experience, or a cited reference with each post.

Answer 1

The difference between internal and external analysis with respect to strategic planning is the internal analysis is done of the internal environment of an organisation including its strategies and operations. The external analysis is done of the external environment of an organisation. Organisations typically analyse the internal strengths and weaknesses of the organisations as part of its analysis as it affects the internal processes and strategies of an organisation. The success of the strategies depend on the internal organisational resources like its human resources, finances, operational processes and expertise. These internal resources and processes are reviewed as part of the internal analysis. The external analysis of an organisation consists of analysing the macro environmental factors of the organisation. The macro environmental factors like the political, economic, social, technological, legal and environmental factors affect the strategy formulation and implementation of an organisation in a given environment.

The results of such analysis inform an organisation's strategic plan as the firm is aware of its internal strengths and weaknesses, opportunities and threats. The internal resources of the organisation are increased or better trained for an effective strategy formulation. The internal analysis helps in identifying the gaps in the internal processes of the organisation. The results of an external analysis helps in evaluating the opportunities and threats in the external environment and leveraging any opportunities based on the internal strengths of the organisation. The firm can identify factors that are favorable and take steps to deal with any threats to its strategies based on assessment of the external environment.