The Internal Business Environment

Business environment is made up of 3 layers.

1. Which ones are they?

(a) Internal Environment

The internal business environment includes factors inside the organization that impact the approach and success of the operations. They include

i. Employees: This is the staff that makes up the company in terms of attitude, experience, skill and knowledge. ii. Managers: The people who make decisions on the direction of the company. iii. Company policies: The ability of the company to enforce expectations upon its staff. iv. Corporate culture: The ability of management to implement a strong business culture.

v. Management style: These are the characteristics of the managers who lead the company and their ability to relate to the staff.

(b). Operating

What tool can we use while analyzing each one of them?

i. SWOT Analysis

A SWOT analysis is used to analyze a business environment. It is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in the business. A SWOT analysis can be carried out for a product, place, industry or person. Some of the questions used to evaluate strengths among others are: what advantages does the organization have? What does the organization do better than anyone else? What unique or low cost resources can it draw upon that others can 't?

Questions under weaknesses include among others: What could you improve? What should you avoid? What factors lose you sales? In opportunities: What good opportunities can you spot? What interesting trends are you aware of? In threats: What obstacles do you face? What are your competitors doing? Is changing technology threatening your position? ii. PESTEL Analysis

A PESTEL analysis is a tool used to analyze and monitor the macro-environmental (external business environment) factors that have an impact on an organization. PESTEL is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental. These are the factors that make up the macro

Five Forces Analysis

Porter five forces analysis is a tool that is used to analyze the level of competition within an industry and a business strategy development. It focuses on industrial organization economics to derive the five forces that determine the competitive intensity and attractiveness of an Industry.

The five forces include: the threat of new competitors, the bargaining powers of buyers and purchasers, the bargaining power of suppliers, the threat of substitute products, and rivalry among competitors. According to Porter, the five forces model should be used at the line of business industry level i.e. at the lower, more basic level: a market in which similar or closely related products and services are sold to the buyers. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you 're considering moving into.

iv. Resource