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Week 4 Discussion: Internal Environment, Power / Weakness, and Decision Models
Kelli Ware
School of Business, Liberty University
Introduction
The assessment of a firm’s internal environment which includes its capital, capacity,
competencies, and competitive standing (Gamble, 2023) requires a relative integration with the
external environment to ensure sustainable and strategic competitiveness within the market.
Ibrahim et al. (2024) advocate for the use of competitive intelligence as a transformational tool
aggregate fragmented data from both enterprise environments into strategic insights that can
be leveraged to maximize market share. To complement this Rumelt’s (2011) theory on
dynamics as a key source of power supports the use of proactive internal adaptation to
strengthen internal resilience and agility. This discussion post puts forward the process for
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strategically assessing the internal environment, investigates dynamics as a key source of power,
and outlines decision models both currently in use and contemplated for use.
Process: Evaluating the Internal Environment
In order to accurately assess the internal environment Ibrahim et al. (2024) suggest the
use of competitive intelligence which is an analysis process that converts collected
compartmentalized competitor and market data into strategic information as a tool for
contextualizing internal strengths against external forces to clearly delineate opportunities from
threats. Here is a comprehensive five-step process for assessing the internal environment.
The first step is to assess the success of the firm’s strategy. To accomplish this, the firm
must aggregate external environment data that has been collected for use as a benchmark for
measuring success, evaluate its revenue generation, retention rate, routine operations/output
and reputation in contrast with its rivals (Gamble, 2023), and using competitive intelligence
ascertain its market positioning (Ibrahim et al., 2024). Step two in the process is to assess the
competitive power of a company’s capital (tangible and intangible) and competencies. Applying
the VRIN model which measures value, rarity, inimitability, and non-substitutability, will aid in
evaluating the firm’s sustainable competitive force (Gamble, 2023). Next, an examination of the
competitiveness of its cost structure and customer value proposition must take place. Achieving
this requires a company to perform a cost comparison, apply benchmarks set through
competitive intelligence factors that reflect data from the competitive environment (Ibrahim et
al., 2024) and assess whether the firm’s value chain strategies are more productive and
profitable than their rivals (Gamble, 2023). After appraising the individualized segments of
market success factors, the next phase of the process is to measure the overall competitive
advantage or disadvantage relative to its rivals (Gamble, 2023). Using the insights gained from
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competitive intelligence, firms can rate their strength in each of the ten key success factor
category compared to their competitors (Gamble, 2023). The final competitive index score will
determine whether they have a net advantage or disadvantage. Lastly, the firm should use the
insights gained from the competitiveness index to analyze and address the insufficiencies and
gaps in performance, formulate solutions for addressing adversarial difficulties, and developing
strategies to leverage market volatility as an opportunity to seize a larger market share (Gamble,
2023 & Ibrahim et al.,
2024).
Strategic Thinking: Key Source of Power/Weakness
An old adage that my father always said to me was, “You’re only as strong as your
awareness of your weaknesses.” Last week we covered a key source of weakness in business as
it is imperative to understand any weaknesses relative to the external environment to clearly
identify how to operationalize power. This week we will dissect dynamics as a key source of
power which enables firms to leverage market variability as a means for garnering sustainable
competitiveness (Rumelt, 2011). As further explained by Rumelt (2011), leveraging dynamics as
an advantage is to identify and exploit opportunities presented by uncontrollable disruptions in
technology, regulatory guideline changes, variable market demand, and other industry
infringements achieved through proactive adaptation. Moreover, Li et al. (2025) reveal how
dynamism in any industry can be a strategic powerhouse if dynamic capabilities are employed
through the use of technology to gather information both externally and internally to identify
opportunities for innovation and make in-the-moment operational adjustments to capitalize on
them. In alignment with Rumelt’s (2011) stance on exploiting dynamics, Li et al. (2025) posits
that adopting resources such as artificial intelligence to enhance a firm’s ability to calibrate their
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internal environment to the dynamism of the external environment facilitates readiness and
adaptive foresight to proactively pursue opportunities as they arise.
Decision Model
The current decision models I use are Krogerus and Tschäppeler’s (2017) Gap-in-
theMarket and The Morphological Box and SCAMPER models. The Gap-in-the-Market model is
specific to assessing the external enterprise environment to facilitate strategic decision making
on where a business fits into the market and as such is irrelevant to the internal environment
evaluation (Krogerus & Tschäppeler, 2017). The Morphological Box and SCAMPER model
supports the internal environment assessment as it focuses on leveraging internal capabilities
that can optimize opportunities that derive from gaps in the market (Krogerus & Tschäppeler,
2017).
The two models I am considering including are Krogerus and Tschäppeler’s (2017)
Double-Loop Learning Model and the Think Outside the Box Model. The Double Loop model
requires strategists to learn from past mistakes, identify the origin of the mistake, question
normalized behaviors and leverage opportunities to adjust (Krogerus & Tschäppeler, 2017).
Doing so supports each of the steps in the internal environment assessment and facilitates
strategic decision making based on what is discovered using that model. The Think Outside the
Box model forces users to come out of the comfort zone to find innovative solutions to market
disruptions (Krogerus & Tschäppeler, 2017). Because of the unpredictability inherent business,
comfort is not a mainstay for any business. Operationalizing this model will facilitate the
development of innovations that bolster competitive standing enabling businesses to leverage
the capabilities of their internal environment to identify opportunities that accompany
dynamism.
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Conclusion
To conclude, the strategic review of a firm’s internal environment as detailed through a
robust five-step process establishes a bridge between internal capabilities and external
opportunities that align with the tactical concepts outlined by Gamble (2023). Incorporating
competitive intelligence and the VRIN framework, businesses can identify systematic strengths,
address gaps in performance, and optimize opportunities inherent in market volatility (Gamble,
2023 & Ibrahim et al. 2024). Li et al. (2025) underpins this by illustrating how adaptive
capabilities improve competitiveness through innovation, highlighting how internal resilience is
strengthened by responsiveness to market turbulence. Layering in Krogerus and Tschäppeler’s
(2017) Double-Loop Learning Model and the Think Outside the Box Model further enhances the
process encouraging reflective and creative adaptation to make strategic internal adjustments.
Cooperatively, these approaches positions gain a competitive edge and builds a solid foundation
for sustaining it.
References
Gamble, J. E. (2023). Essentials of strategic Management: The quest for competitive advantage
(8th ed.). McGraw-Hill Higher Education.
https://mbsdirect.vitalsource.com/books/9781266496622
Ibrahim, A. A., Ahmad, S. Z., & Bakar, A. R. A. (2024). Impact of competitive intelligence on firm
sustainable competitiveness and performance: strategic design collaboration’s mediating
role. Management Research Review. 231–257. https://doi.org/10.1108/mrr-04-
2024-0280
Krogerus, M., & Tschäppeler, R. (2017). The decision book: Fifty models for strategic thinking.
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Profile Books.
Li, L., Xu, C., Zhang, Q., Liu, Y., & Li, Q. (2025). Leveraging generative AI capabilities for
competitive advantage: A moderated mediation analysis of environmental dynamism
and service innovation. Industrial Marketing Management, 128, 10–20.
https://doi.org/10.1016/j.indmarman.2025.05.007
Rumelt, R. (2011). Good Strategy/Bad Strategy: The difference and why it matters. Profile
Books.
Annotated Bibliography
Ibrahim, A. A., Ahmad, S. Z., & Bakar, A. R. A. (2024). Impact of competitive intelligence on firm
sustainable competitiveness and performance: strategic design collaboration’s mediating
role. Management Research Review. 231–257.
Summary of Key Points
This peer reviewed journal article examines the implicit and explicit relationship
between competitive intelligence methodologies on competitive sustainability and
business performance when mediated by strategic design collaboration. The researchers
conducted an empirical study using 179 respondents in senior management position
across multiple transnational enterprise sectors in the pharmaceutical. By adopting a
market orientation posture, the firms were able to use competitive intelligence to
successfully navigate market volatility leveraging gaps in the market as opportunities to
gain a competitive edge. The research revealed that operationalized competitive
intelligence which includes planning, data collection, collation, and analysis had
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significantly positive impacts on competitiveness and performance within the firms
tested.
Evaluation of the Quality of the Publication
This journal article was peer reviewed in September 2024 and released in the
Management Research Review; a journal that publishes highly scrutinized qualitative
and quantitative research that emphasizes executive and managerial implications. The
article has been downloaded and cited multiple times even though it is less than a year
old. The article is professionally written and studied as it utilizes a cross-sectional survey
format with structural equation modeling proving its research rigor. One potential hit
against its credibility was the potential for bias in the survey since the researchers
allowed selfreporting and only focused on a single industry.
Evaluation of the Quality of the Authors
The three authors of this article exhibit impressive academic prowess as they hold a
range scholarly accomplishments that reflect their didactic acumen. Lead author Alyaa
Ibrahim holds a PhD in management, is affiliated with Abu Dhabi University’s College of
Business, and published more than ten peer-reviewed journal articles related to strategic
management. The second author, Syed Ahmad holds a PhD in Business, is affiliated with
Prince Sultan University, Saudi Arabia and has published close to one hundred fifty
scholarly articles surround business, marketing, entrepreneurship, and management.
Abdul Bakar, the third author, is also affiliated with the College of Business at Prince
Sultan University, holds a PhD in Business, has been cited several hundred times, and has
published close to two hundred articles. Given the level of scholarly accomplishments,
the authors are credible, and their work positively contributes to the study of business.
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Where This Fits into the Discussion
This journal article fits into the discussion surrounding internal environment assessment
by positioning competitive intelligence as an essential resource for transforming
randomized raw data into actionable strategic intelligence that enables enterprises to
garner sustainable competitive advantage within the market. One of the purposes of
reviewing the internal environment is to identify areas of improvement and formulate
strategy to make corrections; this article underpins the positive impact of competitive
intelligence on internal strategy design and proactive adaptation.
Li, L., Xu, C., Zhang, Q., Liu, Y., & Li, Q. (2025). Leveraging generative AI capabilities for
competitive advantage: A moderated mediation analysis of environmental dynamism
and service innovation. Industrial Marketing Management, 128, 10–20.
Summary of Key Points
With its rooting in dynamic capabilities theory, this research investigates how artificial
intelligence can be strategically leveraged as an adaptive capability to garner a
competitive edge. The authors breakdown service innovation into three categories,
service concept, process, and consumer experience and illustrate how these three
internal concepts are impacted by dynamism and managed through artificial
intelligence. The study surveyed senior leaders responsible for contributing to strategy
formulation and the use of technology from two hundred sixty firms testing for the
mediating role of service innovation and the moderating role of environmental
dynamism in enterprise competitiveness. The finding revealed a significantly positive
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impact of implementing advanced technology on a company’s performance and
competitive positioning.
Evaluation of the Quality of the Publication
This peer reviewed journal article was released in July 2025 in the Journal of Industrial
Marketing Management which focuses on business-to-business marketing and published
by Elsevier, a publication known for its academic standards. The testing methods
incorporated scales validation, confirmatory factor analysis, regression analysis, and
bootstrapping analysis to ensure the accuracy of the results. Based on the rigor used in
the research, this article is a strong academic contribution to literature on strategic
business decisions and sustainable competitiveness.
Evaluation of the Quality of the Authors
The collective of authors consists of cross-disciplinary subject matter experts in
management, supply chain management, and environmental science with affiliations
with universities in China and France. Each of the authors have published multiple
articles gaining several hundred citations in their respective fields highlighting the
moderating impact of artificial intelligence in the business-to-business context. Lead
author Li is a professor at Xi’an University of Technology in China, Xu and Zhang are
affiliated with the same university, Liu is an associate professor at MBS School of
Business in
Montpellier, France, and Q. Li is affiliated with Weinan Normal University in China.
Their combined experience and expertise reflect greatly on their scholarly reputation.
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Where This Fits into the Discussion
This article bolsters the discussion on internal environment analysis by outlining the
positive impact that advanced digital resources such as artificial intelligence can have on
the internal aspect of the enterprise. Its grounding in dynamic capabilities theory
underscores how artificial intelligence can aggregate accurate information to inform any
necessary strategic shifts identified during the internal examination. It complements the
VRIN framework by displaying the role of artificial intelligence in the analysis of internal
and external data to understand competitive standing and identifies areas of
opportunity for improving positioning within the market.
