WHY IS INTERNAL ANALYSIS DATA IMPORTANT? EXPLAIN BRIEFLY.

An internal analysis is an exploration of your organization’s competency, cost position

and competitive viability in the marketplace. Conducting an internal analysis often incorporates
measures that provide useful information about your organization’s strengths, weakness,
opportunities and threats – a SWOT analysis. The data generated by an internal analysis is
important because you can use it to develop strategic planning objectives to sustain and grow
your business.

Strength and Competency

An important measure in an internal analysis is to determine your organization’s level of

strength and competency. A strong organization uses updated technology systems and equipment
to accomplish its work. Its financial goals are being met and strategic planning objectives are
being accomplished. An organization with strong competency also has a solid brand identity
built upon expertise, capabilities and resources within the organization.

Organizational Weaknesses

A weak organization is one that uses outdated technology, is lacking in expertise or

working with deficient assets. A well-orchestrated internal analysis should bring to light any
such organizational weaknesses that exist – areas in need of improvement and objectives that are
not being realized. Once your analysis has revealed your deficiencies, you can revise your
strategic plan to address and overcome failed objectives and improve or eliminate weaknesses.

Cost Position and Opportunity

An internal analysis should determine the cost position of your organization in your
industry market and your potential to attract and engage new business opportunities. Cost
position involves your business’s ability to acquire and manage resources and deliver exceptional
value to your customers in a way that is unmatched by rival businesses.

Opportunities for business growth can include venture capital partnerships, relationship
prospects in foreign markets and acquisition of competing businesses. An internal analysis can
reveal your preparedness to take advantage of business growth opportunities.
Looming Threats

Striving to position your business at the top of your industry is an ongoing task. New
companies are always entering the marketplace with novel innovations and potential to surpass
you. It’s important to remain aware of changes in your market, the economy, technology and
activities of rival companies that can threaten your viability in the marketplace. Internal analysis
provides important information that can help you build on your strengths, prepare for threats and
keep your business growing.

Competitive Viability

Internal analysis can help you determine how competitive you are in your industry. A
competitively viable business challenges its rivals to match the service or product it offers,
especially if it's using cutting edge proprietary technology, and has strongly enforced quality
control standards.

A competitive business has high intellect human capital – the best and brightest
employees contributing their expertise and innovations to daily operations. The most viable
companies have consistently climbing sales revenues and use efficient supply chains. An internal
analysis will examine the effectiveness of your supplier network, customer loyalty and sales,
providing important metrics you can use to amend your business strategies and become a
stronger competitor in your industry.

Other Reasons:
 Identifies an organization’s strengths and weaknesses
 Outcome from Internal Analysis is information about resources, skills, work
routines, and processes
 What strengths and weaknesses do we have because of our specific resources and
capabilities? -Kraft Foods go Global
 No Internal Analysis = No critical strategic information
 Needed for making good strategic decisions
 Use this critical strategic information for decision making
 Determine current competitive advantages, discover potential advantages, and
what is preventing competitive advantages from being developed
  Provides basis for which strategic actions are necessary for sustainable
competitive advantage

HOW IS AN ORGANIZATION BENEFITED FROM HAVING A STRONG

COMPETENCY? DISCUSS MORE.

Among their many benefits competencies allow businesses to deliver increased value to
their customers, and boost performance among their employees. Competencies are a major
competitive advantage for organizations because they let organizations capture the essence of the
vision and values of the organization, and communicate that in actionable terms to employees. It
also allows employers see how top performers achieve success, instead of simply seeing what
they did achieve. By mapping out the skills and behaviors required for success within an
organization as well as a particular role, you as an employer are able to keep track of an
individual’s ability in each area.

Competencies allow you to offer a competitive training program to your employees,

pinpointing specific areas for improvement and analyzing their strengths and weaknesses. This
means that employees who undertake competency-based training are more likely to see results
faster and avoid wasting time developing unnecessary skills. Employees who are exceeding
expectations in training can also be rewarded, encouraging increased productivity and
engagement, and overall better organizational performance. This has great benefits for
onboarding practices, ensuring that new hires acclimate successfully to a role and are more likely
to stay with a company long-term.

By using competencies, you are able to clarify exactly what is required for success in a
particular job. By putting in the work to think about what skills and behaviors a position requires,
you are more likely to hire the best person for the job. By defining excellence across all roles in
your organization, you’ll be creating a common language for all aspects of talent management.
This has wide-reaching benefits, from an organization’s culture, to meeting goals, to
expanding products and services, and more. Overall, you will have a system of accountability
that will help keep everyone on track and prevent careless errors.
 Competencies also offer a competitive advantage in terms of succession planning. An
organization is only as strong as its weakest link, and it’s important to make sure that your
leadership is working to ensure that everyone is on the path to success. By giving employees a
clear view of what is required to be in a management role, you are more likely to have effective
leadership in place. This also encourages employees to develop their careers within an
organization, instead of seeking a higher level position elsewhere.

By using competencies in talent-management, your organization is sure to experience

greater success and be able to stay ahead of the competition.

With regards to employer and employee relationship, I think this is a good time to
explore the benefits of a competency-based approach to training and assessment. Here are six
benefits – both for the employer and the employee.
1. Cost effectiveness
Since training activities and assessments in a competency-based approach are goal-oriented (i.e.
they focus on areas identified as requiring performance improvement), employers don’t waste
money or time on training the ‘wrong’ areas (i.e. areas in which employees are already capable).
At the same time, employees are more motivated to learn when they realize the benefits of
improved performance. In addition, training, development, and assessment can occur on the job,
which makes it more cost effective for employers. Finally, since this approach focuses on
improving performance, employers are able to reduce cost overruns caused by poor performance.
2. Efficiency
The transfer gap between the training environment and working on the job
is reduced substantially in a competency-based approach. This is because training and
assessment are relevant to what needs to be done on the job. As a result, it takes less time for
employees to become competent in the required areas. This, in turn, contributes to improved
efficiency where training and assessment are concerned.

3. Increased productivity
When employees are competent in meeting their work objectives, know what the performance
expectations are, receive recognition for their abilities, and have insight into the overall
strategy of the team, department, and organization, they are usually more motivated and
experience higher job satisfaction.The result is improved productivity for organizations.
Furthermore, the communication and constructive feedback between employers and employees
improves as a result of a competency-based approach, which also increases productivity.
4. Improved profitability
Rather than relying on employees remembering a vast amount of information, organizations can
make information (e.g. guides, tutorials, and ‘cheat sheets’) available to employees on the job, as
and when the information is required. This has a dual effect – employees are able to use their
knowledge and skills to problem solve instead, and organizations can reduce errors, both of
which could have significantly positive impacts on bottom-line profits.
5. Reduced risk
Using a competency-based approach to training, development, and assessment, employers can
create project teams of people with complementary skills. To do this, organizations record
employees’ acquisition of skills, knowledge, safety and other procedures, and use this to identify
and provide training and assessment for areas requiring development. Not only does this outline
employee development and promotional paths within the organization and give employees the
opportunity to learn more competencies beyond their roles, but it also provides the organization
with greater ability to scale and flex as needed, thereby reducing the risk it faces.
6. Increased customer satisfaction
Employees who have been trained and assessed using a competency-based approach are, by
definition, able to perform the required tasks associated with a job. The knock-on effect is that,
in service-related industries, they are able to provide high service levels, thereby increasing
customer satisfaction.

WHY IS TRYING TO GAIN TOP POSITION IS AN ONGOING TASK?

EXPLAIN BRIEFLY.
Businesses are always looking for ways to improve their practices. The history of industry is
rife with examples of companies that once were at the zenith of success only to find themselves
usurped by hungry competition.
 But is it possible to structure a process of improvement within an organization so that it
aligns with their preferred management tools, team morale and overall objectives? In other
words, can that process of improvement prove productive and worthwhile? Yes. There are many
methods that have been developed to successfully seek out and act on opportunities to help
improve businesses and quash the competition.

Continuous improvement business strategy is also known as a continual or continuous

improvement process. It’s an ongoing process to improve the products, services or processes of
an organization. The improvements sought can be incremental over time or achieved with a
breakthrough moment.

The delivery of those processes is in constant evaluation and change, so further

improvements can be developed and applied. The ruler to measure these changes is the
efficiency, effectiveness and flexibility of these processes.

Some see continuous improvement as a meta-process, such as W. Edwards Deming, an early

proponent, who saw it as part of a larger system of organizational goals. But a bigger definition
considers continuous improvement as a gradual and never-ending process that tries to increase
effectiveness and efficiencies to fulfill a company’s objectives.

There’s a reason human often resist change: There’s a comfort in what we know. While the
call of the unknown is appealing to some, it is a natural and reassuring thing to resist putting
ourselves in new situations. In the business world, this is no longer possible. In times gone by, it
was often possible for companies to “rest on their laurels” and maintain the status quo with their
products and services because people trusted their brands and products and knew what they were
getting. There are several reasons why this doesn’t work anymore:

 There’s More Competition Than Ever: Competition is a good thing. It gives us a basis
for comparison amongst our peers and pushes us to do better. But it also means we aren’t
the only ones offering a certain product, service, or feature. When there’s limited
competition, you can more easily defend your corner of the market, but in today’s
competitive climate, you don’t get a moment’s rest.
  It’s a Global Marketplace: For most industries and businesses these days, you not only
have to be concerned about local competition but also with foreign competition. More
and more borders are coming down, and mature products and services from other markets
can catch you by surprise. If you don’t watch what’s going on elsewhere in the world and
prepare for it, you won’t be prepared to deal with it when it does arrive.

 Information is Everywhere: Consumers are connected 24/7 these days. They have
access to information at their fingertips. For example, 85% of consumers use the Internet
to locate businesses that meet their needs. Whereas previously a product, service or
marketing plan was designed for longevity, nowadays you need to be ready to react to
shifts and trends in the market. It’s important to use the speed of information flow to your
advantage and not sit and watch it fly by.

 Dynamics are Changing: The old walls around products and services have been torn
down, and intelligent, flexible companies are reaping the rewards. Mobile apps are
turning the taxi industry upside down. Online banks are offering an alternative to brick-
and-mortar banks. Home delivery is changing the way we buy everyday products. That
doesn’t mean “traditional” businesses are finished — it just means they need to evolve.

Same old, same old” won’t work anymore. But that doesn’t have to be seen as a bad thing.
On the contrary, realizing and accepting that there is a new way of doing business is exciting and
can create many great opportunities for you and your organization, company or group.

This is continuous improvement. It’s not finding a method that works and sticking with it. It’s
looking at where you are today, setting a goal and doing what needs to be done to reach that
goal. Once that goal is met, you start again, finding ways to improve further. It doesn’t matter
what kind of industry or business you’re in — a continuous improvement approach is necessary
to keep ahead of the game

HOW WILL YOU CHARACTERIZE A COMPANY WITH COMPETETIVE

VIABILITY? DESCRIBE IN DETAILS.
 The best-of-the-best are committed to doing the “work” of business. They don’t avoid the
stuff they don’t like or the tough stuff that defines a leader’s determination to win. Just like
profitability, success is an outcome. Leaders and companies that master the disciplines of success
stand out from their competition. Here are the following that would characterize that a company
is with a competitive viability.

Leadership: First and foremost, the owner of a successful business functions as a

businessperson. This means that the owner is engaged, accountable and drives performance by
paying attention to the business. That being said, it’s easy to identify owners that are so
engrossed in their non-leadership work that the business is essentially free-floating without
direction, structure or systems. This is the equivalent of trying to run a business by remote
control. It just doesn’t work.

Business Culture: The culture of a business represents the collective behavior of its leaders and
employees. Businesses that possess well-defined cultures stand out from the crowd because
they’re a joy to interact with. Customer points of contact at the front desk, retail areas, and
service departments – everything throughout the business feels natural yet orchestrated. What
you don’t see are employees that are indifferent and disengaged. Great business cultures require
leadership, systems, training, coaching, accountability and commitment.

Financial Literacy: Financial literacy is a non-negotiable skill in business. This doesn’t mean
that the owner needs to be an accountant or have the skills of a bookkeeper, but it does mean that
the owner knows how to read and understand financial reports and use them to make the best
possible business decisions. More importantly, the owner is capable of building a cash-flow plan
to project service and retail sales goals complete with a budget to manage expenses. The result is
a business that is fiscally solid and has the cash and resources to fund growth. What you don’t
see are owners in a perpetual state of financial stress with difficulty paying bills and retail
shelves that have more room for dust than they do products to sell. Cash is the fuel of business.
Successful businesses learn and master the skills to be financially responsible in order to ensure
that they will have enough fuel to achieve their goals.
Structure and Systems: If your intent is to grow a dynamic, efficient, quality-driven business,
structure is non-negotiable. Structure ensures efficiency, productivity, consistency and
predictability. Systems produce predictable results. Lack of structure and the absence of systems
all but ensure inconsistency in how work is done, conflicting agendas, dissension, stagnancy and,
worst of all, uncertainty. Call it leadership, accountability, systems, standards of performance, or
policies and procedures; it all refers to the structure that supports success. Anything less than a
deliberate and structured approach to business infuses mediocrity into all activities. Mediocrity
never wins in business.

Skill development: Success is the result of acquiring knowledge and mastering the skills to use
that knowledge to the best of your ability. A commitment to training and education is non-
negotiable for both technical and non-technical skill development. And the ultimate
measurement of a company’s commitment to training and education is found in its first-time
client retention rate (the percentage of first-time clients that return for a second visit within
approximately 90 days). Skill development is an investment in your brand and quality assurance.
“Getting better” is a company value. Got it?

Everyone sells: When it comes to the topic of “selling,” there is always a “love/hate”
relationship. The “love” part is that selling is what every business is all about. Everyone
recognizes this. The “hate” part is best summed up by the fact that not all people are comfortable
with the concept of “selling.” Some people are natural at it while others feel their gut twisting
when in close proximity to a sales situation. The process of selling is just like producing a hit
Broadway show. There are writers, choreographers, set designers, lighting and sound
technicians, an orchestra … and the actors. The applause and success is earned by the collective
efforts of all. It doesn’t matter what an individual’s role is in a company … his or her paycheck
depends on the company’s collective ability to sell.

Work environment: Success has a “look.” It’s common for owners to ask me, “What’s the first
and most important thing I can do to turn my business around?” More often than not, my
response is, “Clean it, paint it and refurbish it.” Front door to back door, everything about the
facility should communicate and support its brand identity. Every piece of equipment should
work. Lighting fixtures should be functioning. Walls, décor, posters, pictures, bathrooms and
dressing rooms should be spotless. Reception areas should look organized and professional.
Dress for success applies to work environments too.

Compensation: Compensation is perhaps one of the most hotly debated topics for owners and
leaders. Commission, Team-Based Pay, fixed rate, sliding scales, product/service charges, or
independent contractor – there is no one right way that will serve the needs of all. But when all
the debating is done, a compensation program must achieve three goals:

1. Inspire and reward the right performance and behaviors: If you keep rewarding performance
and behavior you don’t like … you continue to enable that behavior. Commission-based pay is
notorious for rewarding individual sales while paying for performance and behaviors you don’t
want.
2. Fit the financial reality of the business: There are only 100 pennies in a dollar. Whenever
payroll exceeds a company’s financial reality, it instantly initiates a cash crisis that, if left
unchecked, can be destructive and even kill the company.
3. Provide income growth for employees: The best companies provide employees with growth
paths for income and achieving their full potential. It is up to both parties to make it work.

Brand Identity: When it comes to brand identity, businesses fall into one of three categories:
nondescript, blends in, or stands out from the competition. Nondescript businesses are just bland
places. There’s nothing about the facility, signage, logo, print materials, service or personality
that makes the “wow” meter show signs of movement. There’s nothing overly special.
Businesses with strong brand identities send the “wow” meter flying into the success zone. It’s a
complete package, from web site, print materials and phone experiences to its facility, décor,
team personality, execution of work and all those special touches that radiate success. Each and
every one of the previous eight success characteristics must rate high in order for a strong brand
identity to emerge and endure.

Community Service: The true character of a successful company is defined by how it gives
back to the community. Community service comes in many forms, from fundraising to
employees donating personal time to a worthy cause. Business success simply does not appear
complete if it’s all about making money and generating profit. A business, no matter how
profitable or magnificent, is never truly successful without a warm heart and sincere compassion
for the wellbeing of others.

These are the ten characteristics of a successful business. Collectively, they establish a world-
class standard that forward-thinking and business-minded leaders can strive for.