Fuzzy theory applications in internal analysis

Abstract

The objective of this project is to develop a methodology for a firm's internal analysis using fuzzy set theory. Internal analysis is an important part of strategy formulation. Strategy formulation is based on a clear definition of company mission, an accurate appraisal of the external environment and a thorough internal analysis of the firm. Internal analysis is to identify strengths and weaknesses (SW). Knowing SW, the firm can match its SW with external opportunities and threats with reasonable accuracy, and create optimal combination of internal and external factors for forming new or adjusting current strategies. When the internal analysis is accurate, thorough, and timely, managers are in a better position to formulate effective strategies in response to changes. However, internal analysis is a complex process. Fuzziness exists in the process. Existing approaches using crisp concepts can not carry out internal analysis effectively and practically since they can not handle fuzziness.