The assessment of the company's current position answers two fundamental questions:
Making this assessment involves a rigorous appraisal of the firm's operating and financial performance (evaluation of the internal environment) and a comprehensive analysis of the macroeconomic, regulatory, and marketplace trends (evaluation of the external environment) that shape the environment in which the company operates.
This performance appraisal permits the strategic planners to identify the key internal factors that contribute to the firm's success and to look at these factors in terms of the company's primary strength and weaknesses.
A SWOT analysis is a good tool to determine the company's strengths and weaknesses. The evaluation of the external environment produces a clear picture of the current marketplace opportunities available to the firm and the significant risks and threats it faces in the marketplace. The mapping of the company's strengths and weaknesses against the current opportunities, threats, risks, and success determinants provides a concise assessment of the company's current position.
Evaluation of the internal environment involves making a comprehensive appraisal of the firm's operating and financial performance. The four primary resource bases that serve as the foundation for performance are:

Below is a process that can be used to evaluate the firm's internal and external environments. The various components of the external and internal factors tell you where to go to get the factual data needed to drive the thinking and results of the strategic plan.
