Company diagnostic tools: internal and external environment features and SWOT analysis.
To carry out a correct and complete analysis of the company, it is necessary to apply an orderly methodology that identifies its strengths and weaknesses. The following sections will outline this process.
5.2.1. Internal analysis
The first step should involve classifying the company’s competitive capabilities according to its strengths and weaknesses for the internationalisation process. In some cases, they may not be relevant. In addition, two strengths and weaknesses that are considered to be of great importance for the company’s internationalisation strategy can be added.
| COMPETITIVE CAPABILITES | STRENGHTS | WEAKNESSES | NOT RELEVANT |
| Geographic location | |||
| Available production capacity | |||
| Technology level | |||
| Financial resources for working capital | |||
| Financial resources for investments abroad | |||
| Foreign markets information | |||
| Commercial network and contacts abroad | |||
| Human resources prepared for internationalisation | |||
| International experience of human resources | |||
| Knowledge of languages | |||
| Brand image | |||
| Motivation for internationalisation from the management team | |||
| Ease of decision making | |||
| add one strength | |||
| add another strength | |||
| add one weakness | |||
| add another weakness |
5.2.2. External analysis
This involves classifying the following factors related to the company’s international and sectorial environments, as opportunities in the case of positive factors or threats if they are negative factors. In some cases, they can be irrelevant. In addition, two opportunities and threats that are of significant importance for the company can be added.
| ENVIRONMENT AND SECTOR | OPORTUNITIES | THREATS | NOT RELEVANT |
| Decrease in barriers to foreign trade (tariffs, quotas) | |||
| Technical barriers to foreign trade (certifications, approvals) | |||
| Economic integration of countries (EU, NAFTA, MERCOSUR) | |||
| Widespread use of the internet | |||
| Improvement in transportation systems | |||
| Maturity of the internal market | |||
| Emerging markets appearance (as manufacturers) | |||
| Emerging markets appearance (as consumers) | |||
| Concentration of business ownership | |||
| Increased power of distribution | |||
| Emergence of new products | |||
| Changes in consumer tastes | |||
| Add another opportunity | |||
| Add one opportunity | |||
| Add one threat | |||
| Add another threat |
5.2.3. SWOT ANALYSIS
A SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company’s competitive position and to design an appropriate strategic plan. A SWOT analysis assesses both internal and external factors, as well as current and future possibilities.
This involves ranking the factors based on the outcomes of the internal and external analysis.
| ORDER | STRENGTHS | WEAKNESSES |
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| OPPORTUNITIES | THREATS | |
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5.2.4. Diagnosis
The next step is based on previous results, and involves selecting five fundamental aspects/elements that the company has to take into consideration during the planning and implementation of its internationalisation process.
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