Identification of the company's strengths and weaknesses is a part of internal analysis, not external analysis. Strengths lead to superior performance and weaknesses lead to inferior performance in efficiency, quality, innovation, and customer responsiveness.
Analysis of the macroenvironment is analysis of the wider environment in which the company operates. This is a part of external analysis. Analysis of the macroenvironment includes macroeconomic factors such as inflation and the labor market, social factors such as environmental issues, and government, legal, international and technological factors that affect the industry and the company.
Examination of the industry in which the company operates is a part of external analysis. The industry analysis involves assessing the company's industry, the company’s competitive position in the industry, and the competitive positions of its major rivals. The nature of the industry, the stage the industry is in, the dynamics and the history are all part of this analysis.
Analysis of the national environment in which the company operates is a part of external analysis. Analyzing the national environment includes assessing domestic and international political risk and the impact of globalization on competition within the industry.
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