3.2.1 Which are the most important Analysis Methods?

Analysing your company´s internal environment is crucial for your business success. There are different methods with different objectives which can help you analyse the internal environment of your company. Using only one of these methods is often not enough. This section deals with the following methods: Benchmarking, Balanced scorecard, cost-benefit analysis, break even analysis and SWOT-analysis.

There are numerous definitions for benchmarking. One of the most popular definitions, established by the pioneer in benchmarking, Robert C. Camp, describes benchmarking as "the search for the best industry practices which will lead to exceptional performance through the implementation of these best practices" (Camp, 1989). Camp considers benchmarking as a good tool for organizations aiming to improve their processes. (Daschmann 1996)

Cost-benefit analysis
Cost-benefit analysis helps you to evaluate potential investments. Costs incurred can be calculated easily and precisely, but there are not many good methods available to assess future effects. In addition, these effects are subject to high levels of risk. Cost-benefit analysis closes the gap between the current costs and future benefits of a project or an investment. (Anwander 2002)

Break-even analysis
Break-even analysis on the other hand is an instrument used to calculate the amount of products, which you have to sell in order to gain profits. With the aid of the break-even analysis you can find the break-even point which is determined as the point that separates profit from losses. (Anwander 2002)

SWOT analysis
The SWOT analysis displays important external and internal influence factors. It helps you to identify a multitude of strategic options. A SWOT analysis contains a strengths-weaknesses (S-W) analysis as well as an opportunities-threat (O-T) analysis. It summarizes the main results of research into internal processes as well as research into influencing factors of the environment. (Müller-Stewens 2005)

Balanced Scorecard
Robert Kaplan and David Norton proposed the concept of a balanced scorecard (BSC) as a methodology for measuring an organization?s performance beyond profit margins and dividend yields.(Rivenbark & Peterson 2008) The balanced scorecard measures four dimensions of an organization-financial, internal business, innovation and learning, and customer. For each of these dimensions the scorecard demand managers to develop metrics, performance targets and at the end of each period collect and analyze the data gathered.