Internal Environment in Business: SWOT Analysis, Competencies, and Capabilities

This article discusses the internal environment in a business context, including the importance of SWOT analysis, competencies, and capabilities. It also explores the organization of resources and the Tows Matrix. Subject: Global Business Environment

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENT
INTRODUCTION.......................................................................................................................................3
SWOT.....................................................................................................................................................3
Importance of SWOT..............................................................................................................................3
Competencies and capabilities.................................................................................................................3
Distinctive competencies and distinctive capabilities..............................................................................4
Organization of resources........................................................................................................................4
Tows Matrix............................................................................................................................................5
Production or operations department.......................................................................................................7
Human resources department...................................................................................................................7
CONCLUSION...........................................................................................................................................8
REFERENCES............................................................................................................................................9

INTRODUCTION
The internal environment in a business context refers to the marketing strategies, existing
products, capabilities, abilities, etc of an organization in the market. It is very important for
businesses to understand their internal environment before they work on their external
environment of the organization so that there is a better functioning. The components of internal
environment are labour management, policies, financial resources, planning, vision promoters,
objectives, value system, etc.
SWOT
SWOT is an analyse tool which is used by organizations to understand the internal
environment of the organization and SWOT stands for Strength, Weaknesses, Opportunities and
Threats. This can help the organization to plan for the future of the organization according to this
internal analyse tool so that the risk factor reduces in the organization and the company will be
able to have a stronger market share.
Importance of SWOT
This can help the organization to understand their internal environment better which is a
very essential factor for the organization so that there is a better functioning. This can make the
organization function according to the competitors as well in the market (Mendenhall and et.al.,
2017). Lloyd bank is well aware of its strengths and weaknesses in the market which is why they
are having an effective strategy for themselves so that they can lead in this industry.
Competencies and capabilities
There is ability and skills in an organization which need to be in knowledge of the
organization so that they can use them wisely and get a better functioning and market share for
themselves through this factor. The organization must know their abilities and skills which can
help them grow more in market so that they can plan their steps accordingly.

Distinctive competencies and distinctive capabilities
The company can get more experienced and skilled employees in the organization
because that will get professionalism higher and the loyalty of the customers as well which is a
very essential factor for a bank (Tallman, Luo and Buckley, 2018). Customers have to have a
trust and loyalty to the bank and when there are no errors and professionalism in the organization
then the customers will be able to trust the organization easily.
Organization of resources
There is a direction which all the organizations in the market must have so that their
activities can be planned accordingly. There are set rules and regulations in the business so that
there is a planned functioning which is going to help the organization to have a better functioning
for themselves and high profit margins. There are five resources of an organization which are as
follows.
 Functional Structure
The organization is having a lot of opportunities in the market because of the strategies
which the organization is using from a long time. They have managed to gain the trust of the
customers which is a very important factor.
 Geographical Structure
The organization is spread well globally which is giving the bank a competitive advantage
regarding its location and the customers and the employees of the company are finding it easier
for communication (Kasemsap, 2017).
 Product Structure
The product of Lloyd can reach the customers even online which is a great advantage for the
organization and this is making the organization get a competitive advantage for a long run.
 Matrix Structure

There are traditional methods and modern methods which are combined in the organizational
functioning so that the organization can have better operations. This is a great advantage for the
organization which can make the organization have a better functioning.
 Virtual Structure
There is no temporary production which is taking place in the organization which is why
virtual structure is not so effective in Lloyd bank which can make the organization have a better
functioning (Lasserre, 2017).
Tows Matrix
Strength
1. Lloyd bank has the
strongest network in
UK market for
financial services.
2. Organization is
effective in generating
better profit margins.
3. The bank is very
stable in providing
loans with lower
interest to increase
customer base in UK
market.
4. Bank has many
reliable suppliers
which help to provide
all the essential
resources to increase
potential.
Weakness
1. Due to lack of proper
strategy bank is not as
much popular as its
competitors in UK.
2. Weak employee
communication leads to
lower productivity to
gain better competitive
advantage.
3. Bank also does not
segment their target
customers to attract
them and decrease their
performance of
workforce planning.
4. Lloyd bank is not able
to analyses market
capabilities to develop
effective strategy.

5. Effective in
understanding market
and producing new
products to survive in
market effectively.
Opportunities
1. Brexit has increased
low cost employment
opportunity for the
bank.
2. By adopting
information
Technology Company
can reduce cost and
increase opportunity
to satisfy customers
effectively (Gooris
and Peeters, 2016).
3. Market expansion can
help the bank to
compete in market
and gain better
competitive
advantage.
4. Lloyd bank can attract
customers on social
media platforms using
digital technology.
So
 S1O2
 S2O3
 S5O4
 S2O1
Wo
 W1o1
 W4o4
 Bank can reduce the
weakness of ineffective
customer segments by
adopting effective
digital technology to
gain better data from
market to increase
customer satisfaction.
Threats
 There is a threat of
St
S1T1
Wt
 W1t1 and can be

local Competition.
 Due to impact of
globalization many
potential banks offers
better financial
services to customers.
 As the bank is having
risk of foreign
exchange rates
fluctuations.
 So helps to reduce T1
and grow in market.
 S5T2 is very effective
to improve market
share.
reduced by innovation.
 W4t3 which can impact
company but can be
reduced by effective
strategy and potential
workforce.
Production or operations department
There is a lot of trust which Lloyd bank has gained over the years of their customers in
the market which is a very essential element for the banks to have of the customers. There is a
sense of flexibility as well which is given to the employees of the organization so that the
production and operations are smooth and the customers of the organization as well so that they
can feel comfortable with the organization. When there is professionalism in the organization
then the threats in the organization will reduce as well which is a very essential factor for the
company. There are promotions which have to be done by the bank so that they can get
popularity in the market which is going to help the organization to get more customers in the
organization.
Human resources department
There have to proper hiring in the organization who is well aware of the organization and
the work regarding it. Employees have to be experienced and skilled in this field so that the
organization can have a better culture and ethics which can help the organization to have a
healthier working environment (Kasemsap, 2016). Human resource will have to make the
communication gap go away so that there is clarity in the functioning of the organization which
is going to help the organization to have a better functioning for them. It is because of the

stability in United Kingdom to provide the loans the organization can work on their weaknesses
to get more customers which is a very essential element for the organization.
CONCLUSION
From the above report it can be concluded that it is very essential for organizations to
understand their internal functioning of the organization so that they can get a competitive
advantage which is good for a long and successful run in market.

REFERENCES
Books and Journals
Gooris, J. and Peeters, C., 2016. Fragmenting global business processes: A protection for
proprietary information. Journal of International Business Studies. 47(5). pp.535-562.
Kasemsap, K., 2016. The roles of knowledge management and organizational innovation in
global business. In Civil and Environmental Engineering: Concepts, Methodologies,
Tools, and Applications (pp. 1156-1180). IGI Global.
Kasemsap, K., 2017. Mastering entrepreneurship education in global business.
In Entrepreneurship: Concepts, Methodologies, Tools, and Applications (pp. 2013-
2040). IGI Global.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Mendenhall, M.E and et.al., 2017. Global leadership: Research, practice, and development.
Routledge.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.