Internal Environmental Scan
This section provides the opportunity to develop your course project. Conducting an internal environmental scan or organizational assessment, provides the ability to put the strategy audit together.
In this module, you will conduct a comprehensive assessment of the internal environment at your business unit or organization you are working with for this project, also known as an organizational assessment, and present your findings in a report. In your report, you should analyze the operating characteristics and assets of your business unit.
The SWOT model is one of the most common business tools used during organizational assessment. Another is developing a balanced scorecard based on a prescribed or planned set of performance objectives that will be measured and evaluated regularly. In this assignment, based on the external environmental scan you conducted in M2: Assignment 2 and the internal environmental scan in this assignment, you will develop a SWOT analysis and a balanced strategic scorecard.
Part I: Internal Environmental Scan (2–3 pages)
The internal environmental scan or organizational assessment should include the following:
- Mission, vision, and values: Assess the organization’s understanding of the mission, vision, and values, and how they relate the business strategy. Is there consensus on the mission and vision of the organization? What are the shared values of the organization? What are the behaviors espoused by these values?
- Strategy clarification: Assess the organization’s understanding of the business strategy through the interview with a mid-level or senior manager. Assess his or her understanding and agreement of the business unit’s value proposition, market position, and competitive advantage.
- Cultural assessment: Explain the unwritten rules and shared values that govern behaviors in the organization. Do they act as enablers or blockers to the strategy? For example, is there a culture of information sharing and collaboration that enables the organization to respond quickly across structural boundaries to solve problems for customers? On the other hand, do groups not share important information through informal mechanisms, thus slowing response times?
- Value chain analysis: Identify the primary (direct) and support (indirect) activities that create and deliver your product or service to your customers. Assess each activity’s contribution to competitive advantage through cost or differentiation. Identify any areas where the business may be at a competitive disadvantage.
- Summary of findings: Using these different analyses, identify the organizational strengths and weaknesses as they relate to the business strategy. Organizational strengths are assets, capabilities, and resources that contribute directly to the organization’s strategic fit, differentiation, and competitive advantage relative to competing organizations. Organizational weaknesses are characteristics and capabilities (often lacking) that place the organization at a disadvantage relative to competitors.
Part II: SWOT Analysis (1–2 pages)
Your SWOT analysis should summarize the opportunities and threats from the external environmental scan with the strengths and weaknesses from your organizational assessment or internal environmental scan.
Your output should include a matrix depicting strengths or weaknesses on the horizontal axis and opportunities or threats on the vertical axis. This matrix will reveal a set of strategy forces that can be used to assess the current strategy and identify important potential changes to the strategic direction of the company.
In creating your SWOT analysis, look for natural pairings of internal and external factors that match internal resources and capabilities to the external environment. Internal strengths and external opportunities depicted in the upper-left quadrant on your matrix might form complementary pairs that suggest necessary strategic focus for the business unit to pursue opportunities that fit its competitive strengths. Conversely, internal weaknesses and external threats shown in the lower right quadrant of the matrix may combine to illustrate the need for a defensive strategy to avoid becoming highly susceptible to competitive threats.
Your matrix should not simply be a collection of four lists compiled together in a matrix. Your analysis should combine factors and explain why specific strengths complement specific opportunities, and selected weaknesses are amplified by external threats. In addition to your matrix, provide a brief narrative that summarizes the main findings in your analysis and the implications for the current and projected strategy.
Part III: Balanced Strategic Scorecard (1–2 pages)
Use the balanced scorecard or another similar tool to recommend indicators and measurements that will tell you if the company is successful or unsuccessful in progressing toward your vision through execution of strategy.
A balanced scorecard presents organizational performance on four primary groups of measures:
- Customer (external stakeholder)
- Learning and growth
- Internal process
You should develop a strategy scorecard that ties the performance of your business unit in these areas to its overall business strategy. The challenge you face is selecting two-to-three measures in each of the four areas that give a measurable and reliable indication of the business unit performance in the key activities that promote strategic fit, customer value, and sustained competitive advantage.