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Download slides for Ch 5 Download slides for Ch 5 Presentation Transcript

  • SOM497 – Business Policy & Strategy CHAPTER 5 : Internal Scanning: Organizational Analysis STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN & J. DAVID HUNGER
  • Organizational Analysis
    • External scanning
      • Scan (outside) environment to identify opportunities and threats
    • Internal scanning of strategic factors (aka: Organizational analysis)
      • Look inside firm to identify critical strengths and weaknesses
  • Organizational Analysis: Resource-Based
    • Core & Distinctive Competencies
    • Resources
    • Capabilities
    • Competency
    • Core competency
    • Distinctive competency
    • Evaluation methods
    • Firm’s past performance
    • Firm’s main competitors
    • Understanding environment as whole
    View slide
  • Core & Distinctive Competencies
    • VRINO Framework- help evaluate firm’s competencies
      • V alue
      • R areness
      • I mitability
      • N on-Substitutable ( not in text )
      • O rganization
    View slide
  • VRIN Outcomes Not in your textbook! Is the resource or capability … Competitive Consequence Performance Implications Valuable? Rare? costly to Imitate? Non-substitutable? No No No No Competitive Disadvantage Below average returns Yes No No Yes/No Competitive parity (equality) Average returns Yes Yes No Yes/No Temporary Competitive advantage Above average returns to average returns Yes Yes Yes Yes Sustainable Competitive advantage Above average returns
  • Organizational Analysis: Resource-Based
    • 5-Step Approach Strategy Analysis
    • Identify and classify resources
    • Combine strengths into capabilities
    • Appraise profit potential of capabilities
    • Select strategy that best exploits
    • Identify resource gaps invest in weaknesses
    • Distinctive competencies can come from:
    • Patents
    • Built over time
    • Shared
    • Acquired from someone else
  • Sustainability of Advantage
    • Durability –Rate at which a firm’s underlying resources & capabilities depreciate or become obsolete
    • Imitability –Rate at which a firm’s underlying resources and capabilities can be duplicated by others
        • Transparency
        • Transferability
        • Replicability
        • Continuum of Sustainability
  • Business Models
    • Firm’s way to make money in the current business environment
    • Elements
      • Who does the firm serve
      • What does the firm provides
      • How does the firm make money
      • How does the firm differentiate & maintain its competitive advantage
      • How does the firm provide its products/services
  • Corporate Value-Chain Analysis
    • Allows firms to understand the parts of its operations that create value and those that do not
      • Primary Activities
      • Support Activities
  • Basic Firm Structures
    • Simple structure
    • Functional structure
    • Divisional structure
      • Strategic business units (SBU’s)
      • Conglomerate structure
  • Corporate Culture
    • The set of beliefs, expectations, myths, and values that create a feeling of community among firm members
    • Corporate culture is the “social glue”
    • Strong culture can be beneficial
  • Strategic Marketing Issues
    • Market Position
      • The selection of specific areas for marketing concentration (in terms of market, product, and geographic locations)
    • Market Segmentation
      • Dividing the market into segments to ID available niches
    • Marketing Mix
      • Help gain competitive advantage via:
        • Product
        • Price
        • Place
        • Promotion
  • Strategic Marketing Issues (con’t)
    • Product Life Cycle
    • Pre-commercialization ( not in text ) -> basic strategy: innovate
    • Introduction -> basic strategy: infiltrate
    • Growth -> basic strategy: advance
    • Maturity -> basic strategy: defend
    • Decline -> basic strategy: withdraw
  • Strategic Marketing Issues (con’t)
    • Brand Reputation
      • Name of product that identifies them
    • Corporate Brand
      • Name of firm serves as brand
    • Strong & positive reputation -> source of above average returns
  • Other Strategic Issues
    • Financial Issues
    • Financial manager has to understand the firm’s sources of funds, how they are used
    • Funds (short and long-term) should match the corporate objectives, strategies, and policies
    • Research & Development Issues
    • The firm must also be capable of
      • managing and incorporating their innovations into its daily operations ( technology competence )
      • Taking new technology from lab to marketplace ( technology transfer )
    • Firm’s R&D intensity is a way to gain market share in global competition
  • Next Class
    • Remember there is no class on Tues, Feb 19th (Monday schedule)
    • Next class will be on Thurs, Feb 21
    • Read & prepare to discuss: Case 28 (Panera Bread Company: Rising Fortunes)