Video Transcript: Internal Analysis - An Online Course
Internal analysis. And internal analysis is an objective assessment of your organization so that we can identify its strengths and weaknesses. These strengths and weaknesses then can become part of a SWOT analysis, which looks at strengths, weaknesses, opportunities and threats. However, it's important to look at your strengths and weaknesses in relation to competitors. This is because we're actually looking for relative strengths and relative weaknesses. In other words, if you are strong at something but your rivals are even stronger, then that is actually a relative weakness, whereas, on the other hand, if you consider yourself to be weak at something but your rivals are even weaker, it can become a relative strength. And so things can change fundamentally when we look at our strengths and weaknesses in relation to competition. Another way to look at this internal analysis is not to try to immediately define strengths and weaknesses, but simply to look at the characteristics or simple facts of your business. Then in strategic planning, we can look at how these characteristics can become strengths by deploying them in certain situations and in certain markets. In this way, we can play to our strengths. We can make strengths of our characteristics by choosing the markets in which what we are and what we have are actually relative strengths in relation to those markets. And this is where internal analysis connects with competitive advantage and strategic marketing. So the internal analysis is about knowing ourselves. The Chinese strategist Sun Tzu said, if we know our enemies and know ourselves, then in 1000 battles, we will never be defeated. But actually, it's quite hard to carry out an objective assessment of our own businesses and organizations, and so I urge you to ask other people to make that assessment, to help you to be objective in understanding the strengths and weaknesses of your own organization. Yes, it can be quite scary when they point out criticisms and weaknesses that you might not have identified. On the other hand, I guarantee that they will find strengths that you cannot see yourself. In order to carry out this internal analysis, we could simply start with a blank piece of paper and think of all the characteristics or strengths and weaknesses of your own organization, but I found it helpful to use a checklist that I devised based on my work with creative entrepreneurs around the world. The prime fact checklist is an acronym, and each of the letters of that word points towards a particular aspect of our business that we can then examine in detail. P is for people, and here we're looking at the people in your enterprise, not only the people directly involved, but the stakeholders around your enterprise, including advisors and Associates. The letter R is for reputation. What reputation do we have? Perhaps it's a different reputation with different markets. Perhaps in some markets we don't have any reputation at all. I is for intellectual property. This might be copyright, trademarks, design right? How can we protect that intellectual property, and, more importantly, how can we commercialize that intellectual property to turn it into income streams? M, is for market information. What do we
know about the market in which we're operating? What market intelligence and market research. Do we have? What do we know about our chosen markets and the precise needs of particular customers? E is for ethos. Ethos relates to our values, our culture, our way of doing things. Does everybody share the same ethos. Do we have the same values within the organization? F is for finances, money. How much money do we have? Do we have reserves? Do we have assets that we can invest? Do we have a good financial reputation so that we can borrow? Or go into financial partnerships with other people. A is for agility. How agile are we as an organization? How able are we to change according to the changing needs of our customers and the market in which we're operating? Or are we fixed in our ways? Is there a reluctance to change from some people, agility can be quite important. Let's assess how agile we are. C is for collaborators. Which organizations and businesses can we collaborate with? Do we have existing partnerships that we can use, or do we need to find more of them, or indeed, change the collaborations we already have? Last and not least is talents. What are the precise skills within our organization? What skills are we lacking? How do we need to constantly improve the talents, the skills and the core competencies that we have, and so the prime fact checklist helps us to analyze systematically the characteristics of our businesses and the strengths and weaknesses that we can use in our strategic planning. We have other resources online that you can follow to learn more about strategic planning, to apply it to your enterprise so that you can become even more successful.