what are the result of the external analysis used for
to find out who the competitors are
to define the internal values and mission
to identify key resources and capabilities
to predict the future conditions the firm may face
1. To find out who the competitors are: An external analysis helps in identifying the current competitors in the market. Understanding the competitive landscape is crucial for a firm to develop strategies that can help them stand out and compete effectively.
2. To define the internal values and mission: By conducting an external analysis, firms gain insights into the external factors that can impact their business. This understanding can then be used to define the internal values and mission of the company, aligning them with the changing market dynamics.
3. To identify key resources and capabilities: External analysis provides information about the resources and capabilities of both the firm and its competitors. This analysis helps in identifying key strengths and weaknesses, allowing for strategic decisions regarding resource allocation and optimization.
4. To predict the future conditions the firm may face: By analyzing external factors such as market trends, industry regulations, technological advancements, and economic conditions, firms can gain insights into the future conditions they may encounter. This knowledge helps in making proactive decisions and developing strategies to adapt and respond to potential challenges or opportunities.
Overall, the result of an external analysis helps firms in understanding their position in the market, defining their internal values and mission, identifying key resources and capabilities, and predicting future conditions they may face. These insights enable firms to develop effective strategies and make informed decisions to enhance their competitiveness and long-term success.
The result of an external analysis is used for several purposes. Here are the key outcomes:
1. Identifying Competitors: The analysis helps to determine who the competitors are in the industry or market. It allows the firm to understand their strengths, weaknesses, strategies, and market positions. This information is crucial for developing effective competitive strategies.
2. Defining Internal Values and Mission: The external analysis provides valuable insights into customer preferences, market trends, and societal factors. These insights help the firm in defining its internal values and mission statement. By understanding the external environment, a company can align its values and mission with market demands and expectations.
3. Identifying Key Resources and Capabilities: The analysis helps in identifying the firm's key resources and capabilities that give it a competitive advantage. By considering factors such as technology, intellectual property, distribution channels, or skilled workforce, the company can focus on leveraging these strengths to create value for customers and differentiate from competitors.
4. Predicting Future Conditions: Another crucial outcome of external analysis is predicting the future conditions that the firm may face. By examining industry trends, customer behaviors, regulatory changes, and other external factors, the company can anticipate potential opportunities and threats. This helps in strategic planning, decision-making, and adapting to future market conditions.
In summary, the result of an external analysis aids in understanding competitors, defining internal values, identifying key resources, and predicting future conditions, all of which are essential for developing effective strategies and sustaining a competitive advantage.
The result of conducting an external analysis is to gather information and insights about the external environment that can help a firm make better strategic decisions. Here are four key outcomes of conducting an external analysis:
1. Identifying competitors: One of the main objectives of an external analysis is to identify who the competitors are in the industry or market. This helps a firm understand the competitive landscape, assess their strengths and weaknesses compared to competitors, and plan appropriate strategies to gain a competitive advantage.
To identify competitors, you can start by researching and analyzing industry reports, market studies, and news articles specific to your industry. You can also use online tools and platforms that provide competitive intelligence and data on market players.
2. Defining internal values and mission: External analysis can also help in defining or redefining a firm's internal values and mission. By evaluating the external environment, a firm can identify opportunities and threats that may impact its strategic direction. This analysis helps the firm understand what it wants to achieve, whom it wants to serve, and how it differentiates itself from competitors.
To define internal values and mission, you can conduct surveys and interviews with key stakeholders, analyze customer feedback, and study market trends and consumer preferences. This information can help you align your firm's values and mission with the external realities of the market.
3. Identifying key resources and capabilities: Another outcome of the external analysis is identifying the key resources and capabilities that give a firm a competitive advantage or contribute to its success. By understanding the external environment, a firm can determine the resources and capabilities it needs to develop or acquire to capitalize on market opportunities and stay ahead of competitors.
To identify key resources and capabilities, you can use frameworks such as SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), Value Chain analysis, and Resource-Based View analysis. These frameworks help you assess your firm's strengths and weaknesses and identify areas where you can build or leverage resources and capabilities to gain a competitive edge.
4. Predicting future conditions: Through external analysis, a firm can also make predictions about the future conditions it may face in the industry or market. By understanding the external factors that influence the industry, such as technological advancements, regulatory changes, and shifting consumer preferences, a firm can anticipate future opportunities and threats.
To predict future conditions, you can use various forecasting techniques, scenario planning, and trend analysis. Examining industry trends, conducting market research, and monitoring the political, economic, social, and technological factors (PEST analysis) can help you make informed predictions about the future conditions your firm may encounter.
Overall, the results of conducting an external analysis provide valuable insights and strategic guidance that can help a firm stay competitive, align its internal operations, and prepare for future challenges and opportunities.