What Is an Internal Company Analysis?

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An internal company analysis is a business term strongly associated with a "SWOT" (strengths, weaknesses, opportunities, threats) analysis. An internal company analysis is an evaluation of a company's current position from the combined perspectives of marketing, operations, and finance for strategic use.

Purpose

The ultimate purpose of an internal analysis is to use the information for strategic planning, meaning the company's plan for furthering growth, success, and leadership in the marketplace. Determining the business's strengths and weaknesses translates into the steps necessary for achieving goals.

Source and Content

This analysis is for internal management use only (not for shareholders), and is comprised of assessments made by heads of finance, operations, and marketing, based on data provided by these departments.

Core Competencies

Core competencies are a company's strengths within their market. The strengths could be any or all of the following: products and services offered, customer relationship management, product development and technological innovation, financial position and pricing, among others. These strengths are the business muscles that keep the company in the game with competition.

Customer Relationship Management

Customer relationship management (CRM) has become a key business attribute since the infancy of the Information Age, since the multiplication and accessibility of communication channels has allowed businesses to better understand and serve their customers. CRM weighs heavily as an aspect of internal analysis.

Competitive Advantage

Business success is often contingent on a company's competitive advantage, which is what sets the company's products or services apart from the competition, and is important to the internal analysis. Competitive advantage could be in price, benefits offered, or some brand attribute that distinguishes the company from its competitors.

Weaknesses

Effective strategic management requires the identification of weaknesses, which could range from product pricing to human resource issues. For the internal analysis, it is important to approach the business's weaknesses from both the internal perspective (those that come from within the organization) and from the perspective of the marketplace as a whole, as in how the company is positioned relative to competing companies and alternative products.

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