Internal And External Factors Affecting A Business Organization

Decent Essays
A SWOT Analysis, also known as a situational analysis, is a technique used by companies to evaluate the internal and external factors affecting a business organization. With this useful tool they are able to set future goals, define strategic plans and collect information about the social environment in which they operate. This strategic tool is classified by internal factors (Strengths and Weaknesses), means that the company has total control of it and external factors (Opportunities and Threats), the company cannot control it. Internal factors mean that the company has control over it and are able to decide what happens within the business. For instance: staff morale, financial reserves, leadership and management skills, the location of the business, low cost of production, differentiated products and so on. However, in the external factors the company does not have control of it and has to predict or anticipate what will happen if the environment changes which is always happening. For example: government introducing new laws that does not correlate with your firm, suppliers, competitors intention, market demand, etc. Strengths are those features of the business which allows companies to operate more effectively than its competitors. The product you sell might have the best quality and a cheaper prices than the other companies which makes your demand level increase. Despite of higher prices, one of Apple’s biggest strengths are Brand awareness and reputation.
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