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Components of Internal Analysis - Meaning & Definition

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: May 31, 2023Read time:

What is Components of Internal Analysis?

The four areas that are essential for internal analysis are:

  1. An organization’s resources and capabilities
  2. The configuration and co-ordination of an organization
  3. Organizational structure and characteristics of its culture
  4. Finally the performance of the organization in terms of the strength of its products

Resources are the tangible or intangible assets of an organization essential for its activities and processes. They can either be outsourced or internally generated.

Capabilities are the industry-specific skills, organizational knowledge or the relationships which are usually intangible in nature and can be generated through internal activities. Some competencies are unique to a specific organization in which they excel and these are called as their core competencies and are responsible for their competitive advantage.

The resources generate the capabilities which in turn generate the core competencies which in turn give the value addition to the consumer market.

The configuration of the organization is associated with the places where the organization’s activities in the value chain are performed while coordination is associated with the management of these activities. The configuration can either be a concentration meaning activities limited to a specific geography or dispersion meaning that the activities are spread across a large number of locations. Co-ordination can be either internal or external in nature. Internal coordination refers to the value-adding activities while external coordination refers to the suppliers-channels-customers linkages.

The organizational structure must be so designed that the business must accomplish its objectives effectively and efficiently while the culture determines the magnitude of this accomplishment.

Finally the performance of the organization is analyzed using a portfolio analysis which gives the evaluation on the organization’s range of products.

Hence, this concludes the definition of Components of Internal Analysis along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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