BUSI7770 DB4 Reply 1 Koah

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Discussion Board 4 Reply Discussion Thread: Internal Environment, Power / Weakness, and Decision Models Discussion Thread Reply Hello, Stephanie Thank you for contributing to the organization’s internal environment discussion. In the following paragraphs, we will summarize the key points you have covered. Summary Evaluating the internal environment is essential for managing a company's resources to pursue new endeavors, innovate, and make success plans. The internal environment of an organization can be evaluated in five ways: defining the mission, vision, strategies, and goals, analyzing the organization's resources and capacity, discovering the organization's key competencies, and evaluating strategic issues and problems management should address. The two best indicators of how well a company's strategy is working are financial strength and profitability and competitive strength and market standing. Additionally, the organization's resources are its competitive assets, which can be physical or intangible. Finally, the organization's key competencies are discovered in the fourth step of the internal environment study, determining if the company is competitively weaker or more robust than its competitor. Strategic thinking is essential for the long-term success of organizations, and knowledge management is necessary for strategic planning, decision-making, and problem-solving. A critical internal analysis component evaluates a company's financial health, looking for skills and resources that underlie a competitive advantage. Strengths can be identified by assessing an organization's strengths, allowing for capitalizing on benefits and improving flaws.

PIMS Program (Profit Impact of Market Strategy) is the most known performance analysis method to emphasize the influence of internal strategic factors on an organization's activity. It helps managers understand the factors affecting sales, costs, profits, and market share. Evaluation is essential to assess the internal environment, and improving value chain operations is a source of strength. Critiques A source of strength in evaluating the internal environment within a corporation is improving the value chain operations that are internally carried out. Analyzing the value chain can bring firms opportunities for operational improvement by enhancing efficiency and financially reducing costs. Especially with the exponential increase in technology innovations, increasing modernization is causing higher integration and interdependence among firms across the value chain (Wasan et al., 2023). Value chain analysis has become more pressing than ever. With disruptions becoming more regular and disastrous, companies must build resilience strategies that require understanding value chain risks, exposure levels, susceptibilities, and potential losses (Wasan et al., 2023). According to Razak & Vattikoti (2018), value chain analysis is a tactical technique that aids in developing an organization's structural strategy. It primarily focuses on the activities that add value while enhancing and improving those that do not add value for the clients while providing services. While “a thorough examination of financial accounts can reveal many details about a company and the signs of fundamental issues that may be present,” it can also be a misleading tool to measure company performance. I am afraid I must disagree that the financial analysis will offer compelling strategic insights. Financial indicators seem insufficient, mainly because they are historical and may not be enough to analyze future development (Halek et al., 2020).

Performance assessment systems based on combined financial and non-financial indicators like the balanced scorecard (BSC) have become tools for managing and enforcing short- and long- term corporate strategies and a sound analytical system to aid organizations in performance management (Halek et al., 2020; Sayed & Lento, 2018).

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References Halek, V., Borkovcova, A., & Hasek, F. (2020). Non-financial indicators in the valuation process current trends. E+M Ekonomie a Management, 23 (1), 60- 74. https://doi.org/10.15240/tul/001/2020-1-005 Links to an external site. Razak, A., & Vattikoti, K. (2018). Critical evaluation of value chain analysis for assessing competitive advantage-a study on select companies of e-tailing industry. Academy of Strategic Management Journal, 17 (6), 1-14. Sayed, N., & Lento, C. (2018). Developing a strategy map for environmental consulting firms. International Journal of Productivity and Performance Management, 67 (5), 916– 934. https://doi.org/10.1108/IJPPM-06-2017-0139 Links to an external site. Wasan, P., Kumar, A., & Luthra, S. (2023). How can banks and finance companies incorporate value chain factors in their risk management strategy? The case of agro‐food firms. Business Strategy and the Environment, 32 (1), 858– 877. https://doi.org/10.1002/bse.3179

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