International project appraisal also known by a variety of names such as internal company analysis, profiling the organization, capability or resource audit position and strategic advantage analysis, is the process of evaluating a company’s posture relative to its business competition within and outside the country, overall performance and its capability in terms of strengths and weaknesses.
Significance of International Project Appraisal
- The organization’s deficiency should also be compared with those of its successful competitors. Such perceptive self appraisal when matched with environmental analysis facilities management to grasp the opportunities and combat the threats inherent in the environment.
- International project appraisal has such a vital significance in international corporate planning. Without such am-exercise it will not be possible to formulate economic strategy for an organization on the objective basis.
- It helps the management in choosing the most suitable niche for the organization.
- Economic opportunities may bound in different parts of the globe.
- Position audit of the organization highlights its distinctive capabilities on which empire of foreign business can be gainfully built. It also enables management to formulate suitable competitive strategy.
- It focuses sharply on the areas where it is strong and can operate most effectively.With this kind analysis the management can decide on the type of business, company should engage in a country and what business abandon.
- It provides an insight into the weakness of the organization, through this way the management can take steps to remove the weaknesses of the organization in the long run.
Steps in International Project Appraisal
With the intention of developing the strategic advantage profile of an organization the management should first collect information from external or internal sources both from formal as well as informal channels and then interpret as well as informal channels and then interpret them incisively to determine its strengths and weaknesses. The following steps involved in international project appraisal.
- Identifying strategic factors: The first step in the process of corporate analysis is the identification of all those factors which are crucial to the success of an international organization. These factors may relate to different aspects of the organization. These factors could conveniently be found in different functional areas such as marketing and finance personal, research and development.
- Determining the importance of factors: After identifying crucial factors for corporate appraisal the management will have to determine the importance of each of these factors. Since all the factors may not be of equal value to the organization for accomplishing its purpose it will be very necessary to attach due importance to them.
- Determining strengths and weaknesses: Once the relative significance of different factors has been assessed the management should then attempt to determine the position of the organization in each of these factors. Normally the strengths and weakness of a firm can be assessed by with the firms own past results, comparing with accomplishment of competitors and also by comparing with what they ought to be.
- Constructing strategic advantage profile of a firm: After weighing the significance of each factor for the company in its environment, the management compiles a strategic advantage profile for the firm and compares it with profiles successful competitors of the potential of host countries to develop a pattern of the firms strengths and weaknesses relative to its present and proposed product market strategy.