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Evaluating the

Internal Environment
MBA Toolbox
Internal Analysis

Resource Audit
HR
Operations
Marketing
Value Chain
Value System
McKinsey 7S Framework
VRIO Framework
Core Competencies
Distinctive Capabilities
Portfolio Evaluation
Generic Strategies
Leadership and Culture (7S)
Business Expansion Matrix
Financial Analysis
Strengths and Weaknesses (SWOT)
FINANCIAL PERFORMANCE
INDICATORS
• The financial performance of a company
should be assessed comparing the
company’s performance over time and
with similar firms in the industry
(internal and external benchmarking).
• Ratios are usually used to achieve this
comparison.

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Ratios

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Ratios

http://www.investopedia.com/university/ratios/

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Financial Discussion

Is the business profitable? (internal and external trends)

Sales growth rate?

Is the business solvent?

Is the business properly funded? – Debt and Equity – Gearing

• Highly geared leads to high proportion of debt with risks e.g. risk of not
being able to meet payments.
• Low gearing leads to under investment, low growth, debt not used
efficiently, competitors can overtake the company if they are prepared to
borrow, therefore company will lose market share if not prepared to
expand.

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Prakash Doubles Ltd.

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Financial Analysis

Extract the SW Elements (internal trends)

For competitor analysis: extract the OT
elements (competitor trends)

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Putting it all
together...

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Evaluating
Strategic Fit
Strategic Fit
Produce a SWOT analysis

Analyze the organisation using the EVR
framework

Analyze/discuss the organisation's VMOST

Discussion flows naturally into strategic options
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SWOT Analysis

Summarise all key (prioritised)
outputs extracted from
your MBA toolbox
into the SWOT quadrants.

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MBA Toolbox
Environmental Analysis

Strategic Environment – Market Dynamics
PESTEL Analysis and Scenarios
Five Forces Analysis
Industry Life Cycle Analysis
Key Factors for Success Analysis
Competitor Analysis
Customer Analysis
Degree of Turbulence
MBA Toolbox
Internal Analysis

Resource Audit
HR
Operations
Marketing
Value Chain
Value System
McKinsey 7S Framework (Leadership and Culture)
VRIO Framework
Core Competencies
Distinctive Capabilities
Portfolio Evaluation
Generic Strategies
Financial Analysis
Strategic Options / Business Expansion Matrix
SWOT Analysis

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EVR Congruence
(THOMPSON and MARTIN, 2001)

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NFP... FP...
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Is the
Strategic Framework
appropriate?

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Strategic Fit Review
Produce a SWOT analysis

Analyze the organisation using the EVR
framework

Analyze/discuss the organisation's VMOST

Discussion flows naturally into strategic options
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Strategic Options from SWOT/EVR

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TOWS Matrix

Weihrich, H., (1982) The TOWS Matrix - A Tool for Situational Analysis. LONG RANGE PLANNING, Vol. 15, No. 2, 1982, pp. 54-6
Assignment Progress

• Organisational Overview - VMOST
• Organisational Framework
• External Analysis and KSFs
• Internal Analysis
• SWOT and EVR Congruence
• TOWS possibilities