3.1. Explain which of the following approaches to strategy formulation is more likely to generate economic profits: (a) evaluating external opportunities and threats and then developing resources and capabilities to exploit these opportunities and neutralize these threats or (b) evaluating internal resources and capabilities and then searching for industries where they can be exploited.
Employing internal based resources gives a better competitive edge to an organisation as those resources are already in place. This eliminates extra cost of getting new funding or resources as in option A.
