THE ROLE OF ANALYSIS OF FIRM'S EXTERNAL ENVIRONMENT AND COMPETITIVENESS IN CRISIS CONDITIONS

In the article the author shows the role of analysis of firm's external environment and competitiveness. This role is larger under the circumstances of economic crisis, because it is these kinds of qualitative analysis, which help the management of firm to find ways out of crisis situations and avoid insolvency. The analysis of external environment has to be performed by: Researching the price dynamics of the product or service provided; Studying tax rates, bank loan and deposit rates and the prices of issued securities; Analysing competition on goods and financial markets. The author shows that the actual condition of the firm relative to its external environment has to be analysed by applying portfolio and SWOT analysis. The analysis of external environment has to be performed together with analysis of firm's operations. The objective of these kinds of analyses is, on the one hand, to determine the efficiency of firms operations during the reporting period and establish whether declared objectives have been achieved, but, on the other hand, to define the possible directions of development for firm's operations in the current and future periods, while taking into account the necessary material, financial and labour resources. Firm's operations have to be analysed at all stages of its life, in order to find out the possibilities and reserves that can be drawn upon to ensure optimal utilisation of existing resources at the corresponding firm's life cycle stage. Portfolio matrix is easy to apply as means to analyse and summarise the past and current situation, while the potential or prospective analysis is more appropriate for choosing and evaluating basic future strategy. The author concludes that an analyst at the firm can understand and conceptualise the firm by combining portfolio matrices (the past and the present), analysis of potential (the future), chosen baseline strategies and, finally, past and current accounting results. If such combinations are not considered in this context, then the firm has not been properly evaluated. The author finally illustrates the application of portfolio and SWOT analysis for particular firms in different industries.