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Importance of evaluating a company’s internal environment before making a strategic business plan
Your focus on the importance of evaluating a company’s internal environment before making a strategic business plan was well presented, nicely detailed, very well done, and actually put me into the perspective of a manager looking to develop a business plan. The internal business evaluation examines the business’ internal environment to assess its competitive advantages, competencies, and resources. It is vital to evaluate the external environment to understand a firm’s plan to execute a strategic business plan; this alone isn’t enough. A company must, therefore, better understand some of the internal factors such as the firm’s overall gains in fiscal performance and financial strength along with trends in an organization’s rate of customer retention, size of the business, and firm’s stock price that play significant roles in the story of how a company is operating. This closer look at how a firm handles its affairs, according to your post, is very crucial if at all a business is hoping to achieve unmitigated success in the future.
From reading this post, I strongly agree that it is not enough for a business to only rely on the external environment when formulating a strategic business plan. Still, it also needs to evaluate its internal environment critically. When discussing the importance of internal evaluation in developing a strategic business plan, Gray et al. (2018) note that performing an internal evaluation allows a business to identify its weaknesses and strengths. This knowledge then helps the strategic decision-making of management while carrying out the strategy execution and formulation process. Kuratko et al. (2015) indicate that the combination of external and internal evaluation is the key to acquiring a holistic image of the firm’s environment and developing a strategic business plan that will allow the business to succeed. Kuratko et al. (2015) strictly point out that internal and external evaluation must always be done before developing a strategic business plan.
References
Gray, A., Boehlje, M., Dobbins, C., & Ehmke, C. (2018). The Internal Analysis of Your Farm Business: What Is Your Farmʼs Competitive Advantage?
Kuratko, D. F., Hornsby, J. S., & Covin, J. G. (2015). Diagnosing a firm’s internal environment for corporate entrepreneurship and strategy planning. Business Horizons, 57(1), 37-47.