A STEP BY STEP INTERNAL

ANALYSIS
UNIT 6
Methods to conduct an internal environmental analysis

1. Resource based analysis

2. Performance analysis (including PIMS and balanced scorecard)
3. Value chain analysis
4. Functional analysis
Resources based analysis

The resource based approach evaluates the resources of a business as the foundation for
formulating the businesses marketing strategies.

It can be said that there are 5 steps to adopting a resource analysis approach:
Step 1 – list and define resources according to strengths and weaknesses
Step 2 – list combines resources forming capabilities that might produce SCA’s
Step 3 – formulate the SCA based on the previous step
Step 4 – link resources to different types of strategies
Step 5 – identify potential gaps in resources in the business
Performance analysis

Performance measures can be classified into two categories: financial and non-financial
measures
The following questions can be asked when establishing non-financial measures:
• What is the market standing of the organisation?
• What is the product value in the market?
• What is the customer satisfaction rate?
• What are the marketing management development stages in the organisation?
• What is the marketing productivity rate of the different elements in the organisation?
• What is the sales and marketing productivity of the people in the marketing department?
Performance analysis

When assessing financial performance, the following questions can be asked :

• What is the sales performance, in terms of turnover and profit, for the product?
• What is the contribution of the product mix to the overall turnover or profit of
the business?
• What is the cost of the sales force in relation to the other marketing
communication strategies?
• What is the ROI of the business as a whole?
PROFIT IMPACT OF MARKETING STRATEGY
The main aim of PIMS is to discover empirical principles that determine which
strategic variables, under which circumstances, product the expected ROI results or
cash flow for the organisation

PIMS addresses the following 3 questions:

• What is the typical profit rate for each type of business?
• Given current strategies in a company, what are the future operating results likely
to be?
• What strategies are likely to help improve future operating results?
Value Chain analyses

• Porters value chain measures synergies amongst internal factors of the business
with the overall outcome of enhancing the performance of the organisation.
• According to Porter, every business is made up of a collection of activities that
design, produce, deliver, promote and support a final product.
• These activities can be presented in 5 primary and 4 support activities using the
value chain concept.
Value Chain analyses
Value Chain analyses
Functional analyses

• A business is made up of a number of different functions and if they are used

optimally, they serve as a strength for an organisation. They should be
continually evaluated and improved upon.
Functional analyses