Final answer:
A company should evaluate its current products, production capability and flexibility, employee knowledge, and market demands to determine its strengths and weaknesses. Additionally, understanding market structure and the firm's market power is vital.
Step-by-step explanation:
To determine its strengths and weaknesses, a company should evaluate several aspects. These include:
- Current products: Assessing the performance, quality, and competitiveness of the products the company currently offers.
- Production capability and flexibility: Determining the efficiency of production processes and the ability to adapt to changes.
- Employee knowledge: Evaluating the skills, expertise, and experience of the workforce.
- Market demands: Understanding the needs and preferences of customers and how well the company's products meet these requirements.
Moreover, companies need to consider questions such as: 'How much market power does the firm possess?' and 'How similar is the firm's product to those of other firms in the industry?' To answer these, the company must analyze the market structure and competitive landscape, assessing factors like ease of entry for new competitors and the uniqueness of its products.