The internal environment analysis | internal business environment

The Internal Environment Analysis

The internal environment assessment and analysis is conducted after the external environment analysis. While the external environment analysis seeks to identify opportunities and threats in the external environment, the internal environment analysis seeks to identify the strengths and weakness in your business. Note that it focuses on factors that are internal to your business, some of which can be easily changed or improved upon. The 7's model is particularly useful when identifying internal factors in your business. It looks at the following:

Strategy
Structure
Style
Staff
Skills
Systems
Shared values

Using the model is simple, you simply check for the degree to which your business possess the above 7's. Access which 'S' is a strength or weakness in your business. For example, if your business has the right number of people (Staff) and these people possess the right kind of skills, competence and expertise (Skills), then these are considered to be the internal strengths of your business. Where your business lacks Shared values and Systems, these are considered to be weaknesses. This is discussed further below:

7smodel

1. Strategy

Do your strategies take into account the short term, medium term and long term?

2. Structure

Do you have a formal organizational structure in place?
Are clear lines of reporting or communicating present?

3. Style of leadership

What is your style of leadership?

Participative leadership style
Democratic leadership style
Autocratic leadership style
Dictatorship leadership style

4. Staff

Do you have competent, skilled and experienced staff to work with?
How can you manage to keep staff in the current environment ?
How do you recruit your staff ?
How trustworthy are your employees?
Do your staff work long hours?
How do you retain quality employees?

5. Skills and competencies

What skills and competencies are present in your business?
These may encompass:

Leadership skills
Management skills
Technical skills
Interpersonal skills
Intra personal skills

6. Systems, processes and procedures

What systems, processes and procedures do have in place or intend to put in place?

Performance management system
Financial management system
Management information system
Accounting information system
Quality control system
Health and safety
Stock control system
Cash control system
Accounting system
Expense control system
Debtors control system
Creditors control system
Production related systems

7. Shared values

What qualities or attributes do you base your actions on? What attributes define the culture of your business? What are the core values of your business? Examples of values include:

Timeliness
Reliability
Convenience
Driving internal efficiency
Effectiveness
Efficiency
People
Customer satisfaction
Customer intimacy
Transparency
Accountability
Brand and business reputation
Quality
Innovation
Creativity

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