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Impart your understanding and organizational implications of the External and Internal Analysis! Using an actual organization, explain one practical example for each!

1. The internal factors include things like a company's mission statement, organizational culture, and style of leadership.  These are things that are normally within an organization's control (Hartzell, n.d).

External factors involve things that occur outside of a company that can cause change inside organizations, and are typically out of the company's control.  Examples are customers, competition, economy, technology, political and social conditions, and resources (Hartzell, n.d).

Although the Five Forces Analysis examines the situation faced by the competitors in an industry, the SWOT analysis delves even further by centering its focus on an individual firm.  Below is the basic breakdown of SWOT (Saylor, n.d.):

  1. Strengths - describes what a firm excels at (internal)
  2. Weaknesses - internal factors that prevents organization from reaching optimum levels
  3. Opportunities - favorable external factors to help a company
  4. Threats - external factors that pose potential harm to a company (Investopedia, n.d.)

Dodge, for example, holds its strengths in some record breaking things like having built the world's most powerful sedan; however, its weaknesses are in recalls or things like poor fuel economy when compared with other competitors.  Even though these internal factors of breaking records can lift its reputation and sales, the weaknesses in recalls and fuel economy for can hinder its success.

The external factors for Dodge can be the lack of dominant competition, while some of the threats could involve a failing economy or adverse demographic changes.

2. I am using the SWOT analysis for the company Samsung.  The information below was gathered from an article by Hitesh Basin.

Strength in SWOT

  • Samsungs is the best in terms of design features and technology. It was the first to introduced dual screen mobiles , 65k TFT/LCD colour phone, first phone with polyphonic ringtones, phones with rotating lens, thinnest and lightest note pad etc
  • Samsung enjoys the first mover advantage in terms of introducing advance features in LCD, refrigerator, Air conditioner etc. It introduced the world's smallest MP3 player and India's first 17" TFT-LCD-TV monitor.
  • Samsung took advantage of the growing economy of Asian market by setting up manufacturing plant in India there by reducing logistics and supply chain costs.
  • Samsung brand value increased by 80% in past three years. (Bhasin, 2016)

Weakness in SWOT

  • The demand for LCD panels is expected to decline in the future.
  • Still Nokia is considered to be the most preferred product in India in terms of ease of use, reliability and resale value.
  • Chinese products focus on economies of scale and dump into Indian market for lesser cost. This results in reduction of sales.
  • Samsung is a hardware leader but has too much of dependence for software from other parties.
  • Online stores which sell a wide range of products are giving better deals as they don't incur cost in distribution channel. (Bhasin, 2016)

Opportunity in SWOT

  • Samsung is planning to make the air-condition product category more strong with unique technology called 'Triple protection proposition.
  • Samsung is the India's official 'Olympic partner' for the 2012 London Olympic and recently launched 'Olympic Ratna Program'. This will result enhance brand awareness and increase the sales
  • Samsung Mobile and Home applia.nce has future plans of launching Customized products for Indian market. This will improve the market share in rural market.
  • The Indian youth population is growing and mobile phone sales is expected to increase due to lesser call rates.
  • Its financial position is strong and there is a scope of entering into unrelated diversification. (Bhasin, 2016)

Threats in SWOT

  • Samsung has wide variety of product lines, failure of one product line will have impact on the other and will result in brand dilution.
  • The competitors like Nokia are focussed only in one segment.
  • Since India is a potential market, entry of foreign players is likely high. Foreign players like Haier have already started gaining market share in India in home appliances.
  • Threats from Chinese products.
  • Retail Chains like Bigbazaar sell consumer electronics and home appliance in low cost strategy which are procured in bulks from foreign market. (Bhasin, 2016)

Every company has it's strength's and weaknesses.  Samsung and Apple are very close in the smartphone business and keep trying to one up each other in the phone business and smartwatches.  Opportunities such as being the key sponsor for sports teams, etc. will help Samsung in getting their brand out there and possibly reaching more and more customers.

3. SWOT / TOWS is an analysis of the external environment (threats and opportunities) and the internal environment (weaknesses and strengths). Using this method can create techniques to think about the strategy of an organization, create awareness of the effectiveness of the organization, and can be implemented in any department to maximize the potential (Using, n.d). Using Amazon online retail I will provide a SWOT / TOWS analysis of their organization.

Internal Analysis

The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and weaknesses. Factors should be evaluated across the organization in areas such as:

  • Company culture
  • Company image
  • Organizational structure
  • Key staff
  • Access to natural resources
  • Position on the experience curve
  • Operational efficiency
  • Operational capacity (SWOT, n.d)

External Analysis

Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to:

  • Customers
  • Competitors
  • Market trends
  • Suppliers
  • Partners
  • Social changes
  • New technology
  • Economic environment
  • Political and regulatory environment (SWOT, n.d)

Strengths (Internal Strategic Factors)  

Amazon's strength is its rapid growth of the business in the online market. Consumers are able to find a variety of products that makes it easy for consumer needs, fulfilling Amazon's vision statement and mission statement.

  • Strong well-known brands
  • Extensive product mix
  • Highest revenues and world know in the industry

Weakness (Internal Strategic Factors)  

Amazon's weaknesses present challenges that limit its e-commerce business. This aspect of the SWOT Analysis model outlines the internal strategic factors that impose difficulties in growing the business

  • Easily imitable business model
  • Limited penetration in developing markets
  • Limited brick-and-mortar presence (Greenspan, 2017).

Opportunities (External Strategic Factors)

There are many opportunities available for Amazon to expand their services. They can easily create an amazon brand that can offer the same services to customers. An example would be the Amazon fire tablet and smartphone. Opportunities that Amazon can identify are

  • Penetrate developing markets
  • Expand brick-and-mortar business
  • Boost measures to reduce counterfeit sales (Greenspan, 2017).

Threats (External Strategic Factors) 

External strategic factors that reduce business performance can have an adverse effect if not addressed immediately and / or strategically anticipated.  Amazon must address the following threats to remain competitive in the retail environment:

  • Cyber-crime
  • Imitation
  • Aggressive competition with large retail firms (Greenspan, 2017).

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