The important internal factors which have a bearing on the strategy .
The value system of the founders and those at the helm of the affairs hasimportant bearing on the choice of business, the mission and objectives of the organisation, business policies and practices.
Mission and Objectives:
The directions of development, business philosophy, business policy etc., are guided by the mission and objectives of the company.
Management structure and Nature:
The organizational structure, the composition of theBoard of Directors, professionalisation of management etc., are important factors influencing business decisions..
Internal power relationship:
The support the top management enjoys from different levelsof employees, shareholders and Board of Directors have important influence on the decisionsand their implementation.
The characteristics of the human resource like skill, quality, morale,commitment, attitude etc also contribute to the strength and weaknesses of an organisation.
Company image and Brand equity:
The image of the company matters while raisingfinance, forming joint ventures or other alliances, entering purchase or sale contracts,launching new products etc.
There are a number of other internal factors which contribute to the business success/ failures or influence the decision-making which are1.Physical Assets and Facilities like the production capacity,2.R&D and technological capabilities3.Marketing Resources and distribution network.4.Financial factors like financial policies, financial position and capital structure
The external environment is made up of micro and macro environment.Micro EnvironmentThe micro environment consists of the actors in the company’s immediate environment thataffects the performance of the company which includes the suppliers, marketing intermediaries,competitors, customers and the public