STRATEGIC AUDIT PART I:

EXTERNAL ENVIRONMENTAL ANALYSIS & INTERNAL ASSESSMENT

A. External Environment OT (Opportunities and Threats)
1. Societal Environment: What general environmental forces are currently affecting
both the company and the industries in which it competes? Which present current or
future threats? Opportunities?
a. Economic
b. Technological
c. Politicallegal
d. Sociocultural
2. Task Environment: What forces drive industry competition? Are these forces the
same globally, or do they vary from country to country? Rate each force as high,
medium, or low and discuss.
e. Threat of new entrants
f.

Bargaining power of buyers

g. Threat of substitute products or services

h. Bargaining power of suppliers
i.

Rivalry among competing firms

j.

Relative power of unions, governments, special interest groups, etc,

3. Summary of External Factors (OT)

Which of these forces are the most important to the company and to the industries in which
it competes at the present time? Which will be important in the future?

B. Internal Environment SW (Strength and Weaknesses)

4. Corporate Structure
How is the company structured at present? ls the decision making authority centralized
around one group or decentralized to many units? Is the company organized on the basis
of functions, projects, geography, or some combination of these? In what ways does this
structure compare with those of similar companys?
5. Corporate Culture
What are the main values of the company? ls the culture consistent with the current
objectives, strategies, policies, and programs? What is the cultures position on important

issues facing the company (that is, on productivity, quality of performance, adaptability to
changing conditions, and internationalization)
6. Corporate Resources
a. Marketing: What are the companys current marketing objectives, strategies,
policies programs? How well is the company performing in terms of analysis of
market position and marketing mix (that is, product, price, place, and promotion)
in both domestic and international markets? What percentage of sales comes from
foreign operations? Where are current products in the product life cycle? How well
does the companys marketing performance compare with that of similar
companies?
b. Finance: How well is the company performing in terms of financial analysis?
(Consider ratio analysis) How balanced, in terms of cash flow, is the companys
portfolio of products and businesses? How well does the companys financial
performance compare with that of similar companies?
c. Research and Development (R&D): What are the companys current R&D
objectives, strategies, policies, and programs? Is the company competent in
technology transfer? How well does the companys investment in R&D compare
with the investments of similar companies?
d. Operations

and

Logistics:

What

are

the

companys

current

manufacturing/service objectives, strategies, policies, and programs?

e. Human Resources Management (HRM): What are the companys current HRM
objectives, strategies, policies, and programs? Are they clearly stated or merely
implied from performance and/or budgets? Are they consistent with the
companys mission, objectives, strategies, and policies and with internal and
external environments? What impact have these trends had on past performance
and how might these trends affect future performance? Does HRM provide the
company with a competitive advantage?
f.

Information Systems (IS): What are the companys current IS objectives,

strategies, policies, and programs?

7. Summary of Internal Factors:

Which of these factors are core competencies? Which, if any, are distinctive
competencies? Which of these factors are the most important to the company and to the
industries in which it competes at the present time? Which might be important in the
future? Which functions or activities are candidates for outsourcing?