In order to develop a good strategy it is essential that you know your strengths and weaknesses, i.e. what it is you are good at. An internal analysis is “a process of identifying and evaluating an organizations’ specific characteristics, including its resources, capabilities, and core competencies” (p. 106, Coulter 2005). Internal analysis is important in order to find out where improvements are needed and what you could exploit more in order to gain competitive advantage. Internal analysis takes an inside-out perspective compared to the outside-in perspective of the external analysis. The question here is what you can do yourself. Other relevant questions are if the resources and competencies you possess fit the opportunities in the environment, and if the company can exploit these resources and competencies in new ways.
There are three perspectives on how to gain competitive advantage through internal strategic analysis. The resource based view (RBV), the competence based view (CBV), and the dynamic capabilities view.

The resource based view
There are several types of resources that a company possesses; physical resources, human resources, financial resources, intellectual capital, threshold resources, and unique resources. The RBV is based on the view that these resources are unique if they create sustained competitive advantage, and that a company’s strategy should be based on these resources. For a resource to be unique, it has to possess four attributes; it needs to be Valuable, it has to be Rare, it has to be impossible to Imitate, and there cannot be any substitutes. These four attributes can be remembered easily using the acronym VRIN. So what are valuable resources? Valuable resources contribute to the company’s effectiveness and efficiency. A rare resource is one controlled only by a few firms and is scarce in nature. An inimitable resource cannot be