Environmental Analysis
Environmental Analysis If organizations are to develop successful strategies they must understand the factors in both their internal and external environments that are sources of sustained competitive advantage. Jay Barney, in his article “Firm Resources and Sustained Competitive Advantage”, published in the Journal of Management 1991, Vol. 17 describes a firm as having sustained competitive advantage when “it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy”. A means through which management can understand both its internal and external sources of sustained competitive advantage is by conducting Strengths, Weaknesses, Opportunities and Threats (S.W.O.T.) Analysis. The aim of a S.W.O.T analysis is to develop and implement a strategy that would enable the organization to gain a competitive advantage. In a S.W.O.T Analysis the strengths and weakness that exist inside, and the opportunities and threats that exist outside an organization are identified and analyzed. Only when an understanding of resources and how best to control them exists can a firm possess a sustained competitive advantage.