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2.2.2 Internal environment

The organisation not only needs to be aware of the social, political and economic environment in which it is operating, but also its internal environment ¾ its own strengths and weaknesses. For example, does a port have financial resources such as cash reserves and access to cheap financing from the government? Does it have human resources with the technological skill, motivation and productivity to bring about a radical change of direction for the port if necessary? Does it have facilities that are up-to-date technologically and/or with excess capacity? Does the port have a commitment to on-going research and development?

The list could go on. However, the aim of the exercise is to attempt to match the s trengths and w eaknesses of its internal environment to the o pportunities and t hreats of its external environment. Hence the name of the exercise, abbreviated to its acronym, is a SWOT analysis .

Table 2.3 is an example of a SWOT checklist. However, as you will see, it is a checklist for the corporate level of an organisation. It contains some marketing items, but a checklist at the level of the marketing function would contain predominantly marketing items. When we discuss the use of marketing plans we will revisit the use of a SWOT analysis.

Table 2.3 The SWOT analysis ¾ A checklist

Potential internal strengths

A distinctive competence?
Adequate financial resources?
Good competitive skills?
An acknowledged market leader?
Well-conceived functional area strategies?
Access to economies of scale?
Insulated (at least somewhat) from strong competitive pressures?
Proprietary technology?
Cost advantages?
Competitive advantages?
Product innovation abilities?
Proven management?
Ahead on experience curve?
Other?

 

Potential internal weaknesses

No clear strategic direction?
A deteriorating competitive position?
Obsolete facilities?
Subpar profitability because ... ?
Lack of managerial depth and talent?
Missing any key skills or competencies?
Poor track record in implementing strategy?
Plagued with internal operating problems?
Vulnerable to competitive pressures?
Falling behind in R&D?
Too narrow a product line?
Weak market image?
Competitive disadvantages?
Below-average marketing skills?
Other?

Potential external opportunities

Serve additional customer groups?
Enter new markets or segments?
Expand product line to meet broader range of customer needs?
Diversity into related products?
Add complementary products?
Vertical integration?
Ability to move to better strategic group?
Complacency among rival firms?
Faster market growth?
Other?

Potential external threats

Likely entry of new competitors?
Rising sales of substitute products?
Slower market growth?
Adverse government policies?
Growing competitive pressures?
Vulnerability to recession and business cycle?
Growing bargaining power of customers or suppliers?
Changing buyer needs and tastes?
Adverse demographic changes?
Other?

Source: Thompson and Strickland (1987, p. 98)

Consider this

Are there any items on the checklist that apply to a maritime or logistics company you know of? Can you identify what would be the three greatest strengths, weaknesses, opportunities and threats facing that maritime or logistics company? What is an overall conclusion you would reach about that organisation?

The uncontrollable factors in an organisation's internal environment can be grouped under two broad headings with regard to the marketing function. These are mission and objectives, and resources. We shall deal with each in turn.

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