Explain the purpose of corporate appraisal, Financial Management

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PRC Company, a retailer of baby clothes and toys, has been in existence for 20 years. Its approach to strategy has tended to be informal and emergent rather than planned. However, the company is facing uncertain times and at a recent Board meeting, one of the directors suggested that the company should adopt a more formal approach to how it develops its strategy. He has suggested that the use of strategic management tools and techniques could help and, as a start, has recommended that the company should undertake a corporate appraisal.     

Explain the purpose of corporate appraisal (SWOT), and what would be involved in PRC Company undertaking a corporate appraisal.

Corporate appraisal, sometimes referred to as SWOT, includes the quantitative and qualitative review of a company's internal strengths and weaknesses and its association with external opportunities and threats. In essence, it could be used to summarise the key issues from PRC's business environment and its planned capability, that are most likely to impact on its future strategic development. 

Conducting a corporate appraisal brings together information unoriginal from an analysis of the trends in the external and competitive environments and internal developments that may be of significance to PRC Company. The outcomes from the corporate appraisal could then be used to verify the company's current position and inform while it should continue with its existing strategy or formulate a new strategy that will allow it to operate more effectively.    

 


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