In this step, manager analyse the environment – internal and external. SWOT model (Strength, Weaknesses, Opportunities & Threats) is used to identify the threats and opportunities in the external environment.
• The specific and general environmental factors must be examined carefully, in order to know the threats and opportunities facing the organisation.
• The external environmental analysis, make it possible to recognize the market trends and their effects on the growth of the organisation.
• After completing the external environmental analysis, managers must analyse the organisation’s internal resources and capabilities. This process will highlight the strengths of the organisation, as well as the weaknesses.
• SWOT analysis helps managers to identify areas which can be exploited by the management.
• Managers normally re-evaluate the mission, objectives and strategies after the SWOT analysis. If necessary, changes are made in the organisation’s mission, objectives and strategies.
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