This is understanding where the organisation stands in its environment
It also involves:
Understanding the internal resources and key competencies available
Understanding the level of stakeholder influence
The sort of questions to be asked here include:
What changes are happening in the environment?
How will they affect us?
Do we have any special advantages?
Can we make new opportunities with what we currently have?
How will any changes be viewed by the stakeholders?
So it is basically looking at what the key influences are now (and near future), and what opportunities do our current resources and the environmental changes offer us
Let’s look at that last paragraph in a bit more detail and break it down…
The organisation lives in a complex PESTEL and cultural world. Some organisations are more affected than others - look at historical effects and potential changes
These changes offer both OPPORTUNITIES and THREATS (though it’s impossible to list and analyse each and every one)
Resources and Key Competencies (Internal)
Resources + Key Competencies = Strategic Capability
This can be broken down into STRENGTHS and WEAKNESSES (or competitive advantages and disadvantages)
e.g. Management, Financial Structure, PPE, Products
Skills/Know-how that others would find difficult to imitate (eg Tutors)
An understanding of these may lead to new opportunities
All of the above are not just to be ‘fitted in’ to the current opportunities the environment provides but also ‘stretched’ to create new ones
Corporate governance and cultural aspects are to be considered here, especially in terms of which stakeholder is to be taken most notice of (Think of Mendelow)