How to Conduct External Strategic Management Analysis
An external strategic management analysis is part of SWOT analysis, referring to a company's strengths, weaknesses, opportunities and threats. The first two parts of the SWOT analysis, strengths and weaknesses, refer to internal strategic analysis; the last two parts, opportunities and threats, refer to conducting an external strategic management analysis. All elements of the SWOT analysis work together. Ideally, a company tries to match its strengths to its external opportunities. It also tries to change weaknesses into strengths and threats into opportunities.
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Instructions
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Collect information. Performing an external strategic management analysis is part of conducting a strategic management audit, which begins by collecting information. Using the SWOT analysis for an external audit, only the opportunities and threats to the environment are investigated. The information collected refers to political, social, cultural, technological and environmental trends. Demographic information is also collected. This information is collected by investigating competitors and local information sources.
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Analyze the information collected. All of the information collected is analyzed and categorized.
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Identify opportunities that exist externally. Opportunities are conditions that exist in the environment that could benefit the company if the company accepts the opportunities appropriately and properly. Opportunities can be many things, such as meeting customers' unmet needs and segments in the environment that have not been reached.
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Identify the threats that exist in the environment. External threats are threats that exist without regard to the business. They are conditions that could potentially harm the company if the company does not react properly. Threats are any negative or harmful barriers that could keep the company from reaching its goals. They could include entry barriers and technological advances the company has not investigated.
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Develop action plans. Strategic analyses are conducted to identify opportunities and threats. The purpose is to turn opportunities into strengths and to turn threats into business opportunities. Plans should be developed with time lines and delegated to departments within the organization.
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Continue to monitor the environment. After action plans are created, a company continuously monitors how the plans are working and whether any additional plans must be implemented or if any current plans must be changed.
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References
- Photo Credit Three office workers image by Vladimir Melnik from Fotolia.com
