Faculty of Business

Professional Administration Career

STRATEGIC PLANNING
SESSION 6: Internal Environment Analysis
(AMOFHIT Analysis, EFI Matrix)

Daniel Robles
UNIVERSITY
Fabian [Link]@[Link] NORTH PRIVATE
COURSE ACHIEVEMENT: At the end of the course, the student supports a N
strategic plan for a company, using diagnostic tools, evaluation, and business
analysis, formulating strategies, indicators and specific goals, demonstrating
argumentative mastery, monitoring and control of previously prepared action plans.

UNIT III ACHIEVEMENT: At the end of the unit, the student analyzes the internal
of the organization, using tools for the analysis of activities, for competitive
advantage, through an audit of the competencies and an evaluation of the internal
factors.

ACHIEVEMENT OF SESSION 6: At the end of the session, the student

conceptualizes the internal variables of the company through an AMOFHIT
analysis and the EFI matrix with clarity and great precision.

SESSION 6:

ANALYSIS OF THE INTERNAL

ENVIRONMENT
N
 N

What does an internal analysis

of a company consist of?

What internal analysis should be carried

out
in a company?
 N
“Strengths that competitors cannot easily match or imitate
are called distinctive competencies” Anonymous

• The functional areas of a company have strengths and

weaknesses.
 N
• Some companies are known for their excellent production
and design, others for their marketing, quality of service,
etc.
STRATEGIC PROCESS
INTERNAL ANALYSIS N
• What is important to
distinguish is that the
functional areas or
processes vary according
to the type of company or
institution, and that are
must
responds to mission,
company vision and
strategies.
RELATIONSHIPS BETWEEN FUNCTIONAL AREAS

• Internal analysis requires gathering, assimilating and evaluating

information on administration, finance, accounting, marketing, sales,
production/operations, information systems, technology, etc.
operations. To see if they really meet the expected objectives or not,
and how much they are related to the business mission.

2.
3.
Functions Strengths
Results
Objectives
Weaknesse
s

1.
Mission,
Vision
INTERNAL ANALYSIS N
It is necessary that managers and
representative employees from
across the company participate in
identifying strengths and
weaknesses.
INTERNAL ANALYSIS N
This analysis requires collecting and
assimilating information about all
functions at all levels, so that the
most important strengths and
weaknesses can be collectively
identified.
INTERNAL
ANALYSIS

Participants will understand the

reason for their positions,
departments and divisions as part
of the organization.
WHAT FUNCTIONS TO ANALYSE?
1. Administration (administrative process)
N
2. Organizational Culture
3. Marketing
4. Production/operations
5. Research and development
6. Technology, information systems
7. Export
8. …
They depend on the plan, business, company life cycle, etc.
Compare with best practices.
Furthermore, success today lies in process management.
 INTERNAL
• Key ANALYSIS
internal forces
• The process for performing an internal audit
N
• Relationships between the functional areas of the company (administrative
process)
V Integrating strategy and culture
V Operating with importance to the natural environment
V Planning (strategy formulation)
V Organize (implementation of the strategy)
V Motivate (Direction)
V Integrate staff
V Control (strategy evaluation) • Marketing
V Customer Analysis
V Purchasing supplies
V Sale of products and services
V Product and service planning
V Pricing policies
V Distribution
V Market research
V Opportunity analysis
V Social responsibility
 INTERNAL
• Finance ANALYSIS
and accounting N
V Finance and Accounting Functions

V Investment decision

V Dividend decision

V Basic types of financial ratios

• Production and operations

• Research and development

• Computerized information systems

• Internal Audit Checklist

AMOFHIT
This ANALYSIS
internal analysis N
will show the current situation of the company based on the
analysis of seven functional areas, which are:
Administration and Management (A); Marketing and Sales (M); Operations and
Logistics (O); Finance and Accounting (F); Human Resources (H); Information
Systems and Communications (I); and Technology, Research and Development
(T)
Administration

Marketing

Productive operations/Logistics

Finance/Accounting

Human Resources

Information systems

Research and Development

STRATEGIC PLAN MODEL
IMPLEMENTATION DIRECTION AND CONCLUSIONS
FORMULATION/PLANNING
'Economic
External Social
Analysis
Audit Technological
PLAUSE
Bridge
Remote Global . Ecological
Environ Regon
ment Analysis Key factors
Competitive of Euto
Nearby
Environ
ment C

' Posticas Organizational Structure

' Resources
Strategies 'Operational Plans:
Mission External * Objectives Administration.
SITUATION Long-
Marketing, FUTURE
Values Term Strategies Operations/Production, Finance.
SITUATION
CURREN Goals STRATEGIC Internal Human Resources, IT and
T Communications, I&D technology)
PROCESS

Internal Audit

Administration/
ManagementMarketing
Operations/ProductionFinance Analysis
AMOPHIT
Human
ResourcesInformation Technology
and CommunicationsTechnology
(R&D)
ANALYSIS INTUITION
EXAMPLE OF AMOFHIT ANALYSIS
CASE: CITIBANK'S AMOFHIT

Administration/management:

• Large number of employees, with compliance with the company's objectives and goals.

• Participation in a democratic managerial culture.

Marketing and sales:

• Carry out a variety of promotions and campaigns to promote your products

• Sells credit cards, insurance and carries out financing

Operations and logistics:

• It has the necessary number of employees to carry out its work, providing a quality service to the general public.

• Citibank and all its employees comply with the rules and policies established by the company.
 TO

CASE: CITIBANK'S AMOFHIT N

Finance and Accounting:

• Citibank is in good financial shape, the company is at its highest monetary stability
• No problems with obligations to be paid
• It has good management in the analysis when granting credit.

Human resources:

• Perform constant 'Capacity building' for new staff to develop and maintain skills
• All staff have legal benefits
• It has low staff turnover, which generates a solid organizational structure.

Information and communication system:

• Citibank has a wide range of products and its employees have the necessary information to provide good customer service.

Technology, research and development:

• It has good technology to carry out various transactions or operations. day.

• Most banks in Japan have surveillance cameras. This facilitates the reduction of any risk, in this case Citibank has the
appropriate security that corresponds to it.
 N
EFI MATRIX ANALYSIS

PROCEDURE FOR BUILDING THE

EFI MATRIX
1. Make a list of critical or determining factors for success identified in
the company's internal analysis process.
2. Assign a weight between 0.0 not important 1.0 absolutely N
important, the sum of all should be 1.0, The weight assigned to a
given factor indicates the relative importance of the same to
achieve success in the company's industry.
3. Assign a rating from 1 to 4 where 1=major weakness, 2=minor
weakness, 3=minor strength, 4=Major strength.
4. Multiply each factor weight by its rating.
5. Add the weighted scores together to determine the organization's
weighted rating.
6. Weighted totals well below 2.5 characterize organizations that are
weak internally, while scores well above 2.5 indicate a strong
internal position.
EXAMPLE OF AN EFI MATRIX
Critical factors for success Weight Qualification
N
Weighted
total
Strengths
1. Present ratio rose to 2.52 0.18
2. Profit margin rose to 6.94 0.16
3. Employee morale is high 0.13
4. New computer system
0.10
5. Market share has risen to 24%
0.08

Weaknesses
1. Unresolved legal claims 0.10
2. Plant capacity has dropped to 74% 0.08

3. Lack of system for administration 0.06

strategic
4. R&D spending has risen by 31% 0.06
5. Incentives for distributors have not been 0.05
effective
Total 1.00
EXAMPLE OF AN EFI MATRIX
Critical factors for success Weight Qualification
N
Weighted
total
Strengths
1. Present ratio rose to 2.52 0.18 4
2. Profit margin rose to 6.94 0.16 4
3. Employee morale is high 0.13 4
4. New computer system
0.10 3
5. Market share has risen to 24%
0.08 3

Weaknesses
1. Unresolved legal claims 0.10 2
2. Plant capacity has dropped to 74% 0.08 1

3. Lack of system for administration 0.06 1

strategic
4. R&D spending has risen by 31% 0.06 1
5. Incentives for distributors have not been 0.05 2
effective
Total 1.00
EXAMPLE OF AN EFI MATRIX
Critical factors for success Weight Qualification
N
Weighted
total

Strengths
0.18 x4 ------> 0.72
1. Present ratio rose to 2.52
2. Profit margin rose to 6.94 0.16 4 0.64
3. Employee morale is high 0.13 4 0.52
4. New computer system 0.10 3 0.30
5. Market share has risen to 24% 0.08 3 0.24

Weaknesses
1. Unresolved legal claims 0.10 2 0.20
2. Plant capacity has dropped to 74% 0.08 0.08
1
3. Lack of system for administration 0.06 0.06
1
strategic
4. R&D spending has risen by 31% 0.06 1 0.06
5. Incentives for distributors have not been 0.05 2 0.10
effective
Total 1.00
EXAMPLE OF AN EFI MATRIX
Critical factors for success Weight Qualification
N
Weighted
total
Strengths
1. Present ratio rose to 2.52 0.18 4 0.72
2. Profit margin rose to 6.94 0.16 4 0.64
3. Employee morale is high 0.13 4 0.52
4. New computer system
0.10 3 0.30
5. Market share has risen to 24%
0.08 3 0.24

Weaknesses
1. Unresolved legal claims 0.10 2 0.20
2. Plant capacity has dropped to 74% 0.08 1 0.08

3. Lack of system for administration 0.06 1 0.06

strategic
4. R&D spending has risen by 31% 0.06 1 0.06
5. Incentives for distributors have not been 0.05 2 1 0.10
effective
Total 1.00 2.92
The company has a strong internal position because the total weighted is greater
than 2.5
 REVIEW QUESTIONS N
1 .- What should be analyzed internally in a company?

2 .- What needs to be improved to achieve satisfactory results?

3 .- How is the EFI matrix built?

4 .- What other tool can be used to analyze

internally?
 TEAMWORK
Conduct an Internal Analysis of the company you plan to improve.

WEAKNESS ACTIONS RESPONSIBLE RESOURCES F. START [Link] RESULT

Thank you for your time
Daniel Robles Fabian
[Link]@[Link]

UNIVERSITY
NORTH PRIVATE