Strategic Business Unit Defined
A strategic business unit is a fully functional and distinct unit of a business that develops its own strategic vision and direction.
Strategic Business Unit Defined
A strategic business unit is a fully functional and distinct unit of a business that develops its own strategic vision and direction.
Slides from my class on "Business Model and Strategy" in the Strategy MBA course at Aarhus BSS, Aarhus University (Sep 2014).
Key takeaways:
- business model describes the essence of business in simple terms;
- business model is different from and complementary to strategy;
- business model affects firm’s performance.
Ansoff's Matrix is a classic model of marketing and business strategy that business students can use very effectively in their exams. This revision presentation outlines the key features of the model.
This comprehensive study presentation guides students through the relationship between business and legislation. It outlines the main purposes of legislation in the business environment, including consumer protection, environmental laws, competition policy and health & safety. It also provides some recent case studies of firms and industries affected by changes in legislation.
International Business (BBA MBA) advantages & disadvantages of international busine, approaches of international business, entry strategy, imf, international business (bba mba) entry policy, international organization, nature & scope & feature of international business, need for international business, reasons for recent growth in international busines, what is international business ?university of solapur
Slides from my class on "Business Model and Strategy" in the Strategy MBA course at Aarhus BSS, Aarhus University (Sep 2014).
Key takeaways:
- business model describes the essence of business in simple terms;
- business model is different from and complementary to strategy;
- business model affects firm’s performance.
Ansoff's Matrix is a classic model of marketing and business strategy that business students can use very effectively in their exams. This revision presentation outlines the key features of the model.
This comprehensive study presentation guides students through the relationship between business and legislation. It outlines the main purposes of legislation in the business environment, including consumer protection, environmental laws, competition policy and health & safety. It also provides some recent case studies of firms and industries affected by changes in legislation.
International Business (BBA MBA) advantages & disadvantages of international busine, approaches of international business, entry strategy, imf, international business (bba mba) entry policy, international organization, nature & scope & feature of international business, need for international business, reasons for recent growth in international busines, what is international business ?university of solapur
CHAPTER 4EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, ANDWilheminaRossi174
CHAPTER 4
EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, AND COMPETITIVENESS
Learn how to assess how well a company’s strategy is working.
Understand why a company’s resources and capabilities are central to its strategic approach and how to evaluate their potential for giving the company a competitive edge over rivals.
Discover how to assess the company’s strengths and weaknesses in light of market opportunities and external threats.
Grasp how a company’s value chain activities can affect the company’s cost structure and customer value proposition.
Understand how a comprehensive evaluation of a company’s competitive situation can assist managers in making critical decisions about their next strategic moves.
4–‹#›
EVALUATING A FIRM’S
INTERNAL SITUATION
How well is the firm’s present strategy working?
What are the firm’s competitively important resources and capabilities?
Is the firm able to take advantage of market opportunities and overcome external threats to its external well-being?
Are the firm’s prices and costs competitive with those of key rivals, and does it have an appealing customer value proposition?
Is the firm competitively stronger or weaker than key rivals?
What strategic issues and problems merit front-burner managerial attention?
4–3
QUESTION 1: HOW WELL IS THE FIRM’S PRESENT STRATEGY WORKING?
Best indicators of a well-conceived,
well-executed strategy:
The firm is achieving its stated financial and strategic objectives.
The firm is an above-average industry performer.
4–4
FIGURE 4.1
Identifying the Components of a Single-Business Company’s Strategy
4–5
SPECIFIC INDICATORS OF
STRATEGIC SUCCESS
Growth in firm’s sales and market share
Acquisition and retention of customers
Strengthening image and reputation with customers
Increasing profit margins, net profits and ROI
Growing financial strength and credit rating
Leadership in factors relevant to market\industry success
Continuing improvement in key measures of operating performance
4–6
Sluggish financial performance and second-rate market accomplishments almost always signal weak strategy, weak execution, or both.
4–7
STRATEGIC MANAGEMENT PRINCIPLE
Key Financial Ratios
TABLE 4.1
4–8
Key Financial Ratios
TABLE 4.1
4–9
Key Financial Ratios
TABLE 4.1
4–10
Key Financial Ratios
TABLE 4.1
4–11
QUESTION 2: WHAT ARE THE FIRM’S COMPETITIVELY IMPORTANT RESOURCES AND CAPABILITIES?
Competitive Assets
Are the firm’s resources and capabilities.
Are the determinants of its competitiveness and ability to succeed in the marketplace.
Are what a firm’s strategy depends on to develop sustainable competitive advantage over its rivals.
4–12
A resource is a competitive asset that is owned or controlled by a firm
A capability or competence is the capacity of a firm to perform and internal activity competently through deployment of a firm’s resources.
A firm’s resources and capabilities represent its competitive assets and are big determinants of ...
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
2. 4-2
1. How well is the company’s
present strategy working?
2. What are the company’s resource
strengths and weaknesses and its
external opportunities and threats?
3. Are the company’s prices and
costs competitive?
4. Is the company competitively stronger
or weaker than key rivals?
5. What strategic issues merit
front-burner managerial attention?
Company Situation Analysis:
The Key Questions
4. 4-4
Question 1: How Well is the Company’s
Present Strategy Working?
Must begin by understanding what the strategy
is
Identify competitive approach
Low-cost leadership
Differentiation
Focus on a particular market niche
Determine competitive scope
Broad or narrow geographic market coverage?
In how many stages of industry’s production/distribution chain
does the company operate?
Examine recent strategic moves to improve its C.P.
Identify functional strategies
Key ConsiderationsKey Considerations
5. 4-5
Qualitative assessment
–
Is the strategy well-
conceived?
Covers all the bases?
Internally consistent?
Makes sense?
Timely and in step with
marketplace?
Quantitative
assessment – What are
the results?
Is company achieving its
financial and strategic
objectives?
Is company an above-
average industry
performer?
Approaches to Assess how Well
the Present Strategy is Working
6. 4-6
Indicators of how Well a Company’s
Strategy is working
Whether a firm’s sale is growing faster, slower, or about
the same pace as the market as a whole thus resulting in
a rising, eroding or stable market share
Whether the company is acquiring new customers at an
attractive rate as well retaining existing customers
Whether the firm’s profit margins are increasing or
decreasing; how well its margins compare to the same
trends for other companies in the industry
Trends in net profits and return on investment and how
these compare to the same trends for other companies
in the industry
7. 4-7
Indicators of how Well a Company’s
Strategy is Working
Whether the company’s overall profits and market and
credit rating are improving or on the decline
Whether the company can demonstrate continuous
improvements in such internal performance measures as
days of inventory, employee productivity, unit cost etc.
How share holders view the company based on trends in
the company’s stock price and share holders value
The firm’s image and reputation with its customers
How well the company stacks up against rivals on
technology, product innovation, customer service,
product quality, delivery, time, price, getting new
products to market quickly, and other relevant factors on
which buyers base their choice of brands
8. 4-8
S W O TS W O T represents the first letters in
SS trengths
WW eaknesses
OO pportunities
TT hreats
For a company’s strategy to be well-
conceived, it must be
Matched to its resources/strengths and weaknesses
Aimed at capturing its best market opportunities and
erecting defenses against external threats to its well-
being
S W
O T
Question 2: What Are the Company’s Strengths,
Weaknesses, Opportunities and Threats ?
9. 4-9
A strength is something a firm does well or an attribute
that enhances its competitiveness
A skill, specialized expertise or
competitively important capabilities
Skills in low cost operations,
Technological expertise
Defect free manufacturing
Proven capabilities in developing and introducing innovative
products
Cutting edge supply chain management capabilities
Expertise in getting new products to the market quickly
Expertise in providing good customer service
Resource strengths and competitive
capabilities are competitive assets!
Identifying Resource Strengths
and Competitive Capabilities
10. 4-10
Identifying Resource Strengths
and Competitive Capabilities
Valuable physical assets
State-of-the-art plants and equipments
Attractive real estate locations
World wide distribution facilities
Ownership of valuable natural resource deposits
Valuable human assets and intellectual
capital
An experienced and capable workforce
Cutting edge knowledge in technology or other important
business areas
Proven managerial knowledge
11. 4-11
Identifying Resource Strengths
and Competitive Capabilities
Valuable organizational assets
Proven quality control systems
Propriety technology, key patents
State-of-the-art systems for doing business via internet
A strong network of distributors or retail dealers
Sizeable amounts of cash or marketable securities
A strong balance sheet
Valuable intangible assets
Powerful or well known brand name
A reputation for technological leadership
Strong buyer loyalty and goodwill
12. 4-12
Identifying Resource Strengths
and Competitive Capabilities
An achievement or attribute that puts a company in a position
of market advantage
Low overall cost relative to competitors
Market share leadership
A superior product
A wider product line than rivals
Wide geographic coverage
Competitively valuable alliances or cooperative ventures
Fruitful partnership with supplier that reduces cost and enhances
product quality and performance
Joint ventures that provide access to valuable technologies,
specialized know-how and/or geographic markets
13. 4-13
Competencies vs. Core Competencies vs.
Distinctive Competencies
A competency is the product of organizational learning and
experience and represents real proficiency in performing an
internal activity
Some competencies relate to specific skills and expertise
They spring from proficiency in a single discipline or function and
may be performed in single department or unit e.g.
Just in time inventory control
Low cost manufacturing efficiency
• Other competencies are inherently multi-disciplinary and cross
functional
• They are a result of effective collaboration among people with
different expertise working in different departments e.g.
Continuous product innovation comes from teaming the efforts of
people or groups with expertise in market research, R&D, design,
engineering, and market testing
14. 4-14
Competencies vs. Core Competencies vs.
Distinctive Competencies
A core competency is a well-performed
internal activity central (not peripheral or incidental) to a
company’s competitiveness
and profitability
A company may have more than one core
competency in its resource portfolio
Rarely a company can legitimately claim more than
two or three core competencies
More often a core competency is knowledge based
residing in people and in a company’s intellectual
capital and not in its assets on the balance sheet
A core competency is likely to be grounded in cross-
department combination of knowledge and expertise
rather than being a product of a single department
15. 4-15
Competencies vs. Core Competencies vs.
Distinctive Competencies
A distinctive competency is a competitively valuable
activity a company performs better than its rivals
Signifies greater proficiency than a core competency
The conceptual difference between a competency,
core competency, and a distinctive competency
draw attention to the fact that a company’s resource
strengths and competitive capabilities are not
always equal
Core competencies are competitively more
important resource strengths than competencies
because they add power to the company’s strategy
and have a bigger positive impact on its market
position and profitability
16. 4-16
Competencies vs. Core Competencies vs.
Distinctive Competencies
A distinctive competency is a competitively
potent resource strength for three reasons:
1. It gives a company competitively valuable
capability that is unmatched by rivals
2. It has a potential for being the cornerstone
of the company’s strategy
3. It can produce a competitive edge in the
market place since it represents a level of
proficiency that is superior to rivals
17. 4-17
What is the Competitive Power of a
Resource Strength?
1. Is the resource strength hard to copy?
2. Is the resource strength durable – does
it have staying power?
3. Is the resource really competitively
superior?
4. Can the resource strength be trumped
by different resource strengths and
competitive capabilities of rivals?
18. 4-18
Identifying Resource Weaknesses
and Competitive Deficiencies
A weakness is something a firm lacks, does
poorly, or a condition placing it at a
disadvantage
Resource weaknesses relate to
Inferior or unproven skills,
expertise, or intellectual capital
Lack of important physical,
organizational, or intangible assets
Missing capabilities in key areasResource weaknesses and deficiencies
are competitive liabilities!
21. 4-21
Identifying a Company’s
Market Opportunities
Opportunities most relevant to a
company are those offering:
Good match with its financial and
organizational resource capabilities
Best prospects for profitable
long-term growth
Potential for competitive advantage
22. 4-22
Identifying External Threats
Emergence of cheaper/better technologies
Introduction of better products by rivals
Entry of lower-cost foreign competitors
Onerous regulations
Rise in interest rates
Potential of a hostile takeover
Unfavorable demographic shifts
Adverse shifts in foreign exchange rates
Political upheaval in a country
26. 4-26
Prentice Hall, 2000 Chapter 5 26
SO Strategies
Generate strategies here
that use strengths to take
advantage of opportunities
ST Strategies
Generate strategies here
that use strengths to
avoid threats
WO Strategies
Generate strategies here
that take advantage of
opportunities by
overcoming weaknesses
WT Strategies
Generate strategies here
that minimize weaknesses
and avoid threats
INTERNAL
FACTORS
(IFAS)
EXTERNAL
FACTORS
(EFAS)
Strengths (S)
List 5 – 10 internal
strengths here
Weaknesses (W)
List 5 – 10 internal
weaknesses here
Opportunities (O)
List 5 – 10 external
opportunities here
Threats (T)
List 5 – 10 external
threats here
TOWS Matrix
5.4 TOWS Matrix (Fig. 5.2)
Source: Adapted from Long-Range Planning, April 1982, H. Weihrich, “The TOWS Matrix—A Tool for Situational Analysis”
p. 60. Copyright 1982, with kind permission from H. Weihrich and Elsevier Science Ltd. The Boulevard, Langford Lane,
Kidlington OX5 1GB, UK.
27. 4-27
The Strategic Position and Action Evaluation
Matrix (SPACE)
Select a set of variables to define Financial Strength (FS),
Competitive Advantage (CA), Environmental Stability (ES), and
Industry Strength (IS)
Assign numerical value ranging from +1( worst) to +6 (best) to
reach variable that make up FS and IS dimension.
Assign numerical value ranging from -1 ( best) to -6 ( worst) for ES
and CA
Compute the average score for FS, IS, CA, and ES
Plot the average for FS, IS, CA, and ES on the appropriate axis
Add the two scores on the x axis and plot the resultant point on X.
Add the two scores on the y-axis and plot the resultant point on Y.
Plot the intersection of the new xy point
Draw a directional vector from the origin of the SPACE Matrix
through the new intersection point. The vector reveals the type of
strategies recommended for the organization: aggressive,
competitive, defensive, or conservative
28. 4-28
Y axis X axis
1. Financial Strength (FS
Return on Investment
Leverage
Liquidity
Working capital
Cash Flow
Ease of Exit
Risk involved in business
1. Industry Strength ( IS)
Growth Potential
Profit potential
Financial stability
Technological Know-how
Resource utilization
Capital intensity
Ease of entry
Productivity, capacity utilization
2. Environmental Stability (ES)
Technological Changes
Rate of Inflation
Demand Variability
Price range of competitive products
Barriers to entry
Competitive pressure
Price elasticity of demand
2. Competitive Advantage (CA)
Market Share
Product Quality
Product life cycle
Customer loyalty
Competition’s capacity utilization
Technological know-how
Control over suppliers and distributors
29. 4-29
Hypothetical example of SPACE Matrix (Y axis)Hypothetical example of SPACE Matrix (Y axis)
Financial Strength (FS)Financial Strength (FS)
Return on Investment = + 6Return on Investment = + 6
Leverage = + 5Leverage = + 5
Liquidity = + 5Liquidity = + 5
Working capital = + 5Working capital = + 5
Cash Flow = + 4Cash Flow = + 4
Ease of exit = +1Ease of exit = +1
Risk Involved = + 4Risk Involved = + 4
Total Score = + 30Total Score = + 30
Average Score = 30/7 = 4.28Average Score = 30/7 = 4.28
Environmental Stability ( ES)Environmental Stability ( ES)
Technological change = - 4Technological change = - 4
Rate of Inflation = - 3Rate of Inflation = - 3
Demand variability = - 3Demand variability = - 3
Price range of competitivePrice range of competitive
products = -5products = -5
Barriers to entry = - 1Barriers to entry = - 1
Competitive pressure = - 4Competitive pressure = - 4
Price elasticity of demand = - 3Price elasticity of demand = - 3
Total score = -23Total score = -23
Average Score = -23/7= - 3.28Average Score = -23/7= - 3.28
30. 4-30
SPACE Matrix Calculation X axisSPACE Matrix Calculation X axis
Industry Strength ( IS)Industry Strength ( IS)
Growth Potential = + 5Growth Potential = + 5
Profit Potential = +5Profit Potential = +5
Technological Know how = +Technological Know how = +
33
Resource utilization = +4Resource utilization = +4
Capital Requirement = +6Capital Requirement = +6
Ease of Entry = +6Ease of Entry = +6
Productivity, capacityProductivity, capacity
utilization = +4utilization = +4
Total Score = +31Total Score = +31
Competitive Advantage (CA)Competitive Advantage (CA)
Market Share = - 2Market Share = - 2
Product Quality = - 3Product Quality = - 3
Product life cycle = -2Product life cycle = -2
Customer Loyalty = -1Customer Loyalty = -1
Competition’s capacity utilization = -3Competition’s capacity utilization = -3
Technological Know how = -3Technological Know how = -3
Control over suppliers andControl over suppliers and
Distributors = -1Distributors = -1
Total Score = 15Total Score = 15
Average CA Score = - 2.14Average CA Score = - 2.14
31. 4-31
SPACE Matrix CalculationsSPACE Matrix Calculations
ES Average Score = -3.28 + Average FS Score( + 4.28) = + 1ES Average Score = -3.28 + Average FS Score( + 4.28) = + 1
Average CA Score = -2.14 + Average IS Score ( 4.42) = + 2.28Average CA Score = -2.14 + Average IS Score ( 4.42) = + 2.28
CACA ISIS
FSFS
ESES
xx
xx
33. 4-33
An aggressive profile suggests and Innovator Strategy; the
company is in a position to invest further and introduce new
market offerings; product development and market
development are real options here.
A conservative profile is suggestive of an Analyzer Strategy;
the company will staunchly defend its domain while cautiously
looking for new opportunities of diversification
A Competitive Profile may augur well for a flanker’s role, as
the company may not have the resource strengths to meet the
competitors head-on
A Defensive Profile is self-explanatory where the company is
only looking to doggedly defend its domain and innovates only
on the periphery.
Interpreting the Profiles
34. 4-34
Assessing whether a firm’s costs are
competitive with those of rivals is a crucial
part of company situation analysis
Key analytical tools
Value chain analysis
Benchmarking
Question 3: Are the Company’s
Prices and Costs Competitive?
35. 4-35
A company’s business consists of all activities
undertaken in designing, producing, marketing,
delivering, and supporting its product or service
All these activities that a company performs internally
combine to form a value chain —so-called because the
underlying intent of a company’s activities is to do things
that ultimately create value for buyers
The value chain contains two types of activities
Primary activities (where most of
the value for customers is created)
Support activities that facilitate
performance of the primary activities
Concept: Company Value Chain
37. 4-37
Value Chain Activities in Service Firms
Wholesalers:
Primary Activities:
(a) merchandize selection and purchasing,
(b) Inbound shipping and warehousing
(c) outbound distribution to retailers
Department Store Retailer
Primary Activities
(a) merchandize selection and buying
(b) store layout and product display
(c) advertising and customer service
A Hotel Chain
Primary Activities
(a) site selection and construction
(b) reservations
(c) hotel operations
(d) managing lineup of hotel locations
38. 4-38
Steps in Corporate Value Chain Analysis
1. Examine each product line’s value chain in terms of
various activities involved in producing that product or
service.
Which activities can be considered core competency or
weakness
Can any core competency be labeled as distinctive
competency
2. Examine the “linkages” within each product’s value chain
Linkages are the connections between the way one value
activity is performed and the cost of performance of another
activity
3. Examine the potential synergies among the value chain of
different product lines/ businesses
39. 4-39
Why Value Chains of Rival Companies
Often Differ?
A company’s value chain depends on:
the manner in which it performs its own business
and internal operations,
its strategy, the approaches it is using to execute
this strategy,
underlying economics of the activities themselves
• Because these activities differ from company to
company the value chain of rival companies differ
and thus their cost positions
40. 4-40
Why Value Chains of Rival Companies
Often Differ?
a. Competing companies may differ on the degree of
vertical integration
- Comparing the value chain of a fully integrated
and partially integrated rivals require adjusting the
differences in scope of activities
- The costs of internally performed activities for a
manufacturer will be greater than the cost of
internally performed activities of producers who
buy the needed parts and components from
outside suppliers and only perform assembly line
operations
41. 4-41
Why Value Chains of Rival Companies
Often Differ?
b. There is legitimate reason to expect that value chain and cost
differences between companies pursuing a low cost/ low price
strategy and a rival that is positioned on high end of the market
would be different
c. Cost and price differences among rival firms can have their
origin in activities performed by suppliers and distributors
or by distribution channel allies involved in getting these
product to end users
- Suppliers or wholesale dealers may have excessively high cost
or profit structures that jeopardize a company’s cost
competitiveness even though its cost for internally performed
activities are competitive
42. 4-42
The Value Chain System for Entire
Industry Accurately assessing a company’s competitiveness in end use
markets require that managers must understand the entire value
chain system for delivering a product or service to end
users, not just company’s own value chain
At the very least it means considering the value chain of
suppliers and forward channel allies
Suppliers’ value chains are relevant because:
1. Suppliers perform activities and incur costs in creating and
delivering the purchased inputs used in company’s own value
chain
2. The costs, performance features and quality of these inputs
influence a company’s own cost and product differentiation
capabilities
Any thing a company can do to help its suppliers take cost out
of their value chain activities or improve the quality and
performance of the item being supplied can enhance its own
competitiveness
43. 4-43
The Value Chain System for Entire
Industry
Forward channel and customer value chain are
relevant because:
1. The costs and margins of a company’s
distribution allies are part of the price paid by end
users
2. The activities that distribution allies perform affect
end users’ satisfaction
For these reasons companies normally work
closely with forward channel allies to perform
these value chain activities in a mutually
beneficial way
45. 4-45
Developing Data to Measure a Company’s
Cost Competitiveness
After identifying key value chain activities, the next step
involves determining costs of performing specific value
chain activities using activity-based costing
Appropriate degree of disaggregation depends on
Economics of activities
Value of comparing narrowly defined
versus broadly defined activities
Guideline – Develop separate cost
estimates for activities
Having different economics
Representing a significant or growing proportion of
costs
46. 4-46
Determining whether a company’s costs are in line with
those of rivals requires:
Measuring how a company’s costs compare with
those of rivals activity-by-activity
Requires having accounting data to measure cost
of each value chain activity
Activity-based costing entails:
Defining expense categories according
to specific activities performed and
Assigning costs to the activity
responsible for creating the cost
Activity-Based Costing: A Key
Tool in Analyzing Costs
48. 4-48
Focuses on cross-company comparisons of how
certain activities are performed and what costs are
associated with these activities:
Purchase of materials
Payment of suppliers
Management of inventories
Getting new products to market
Performance of quality control
Filling and shipping of customer orders
Training of employees
Processing of payrolls
Benchmarking Costs of
Key Value Chain Activities
49. 4-49
Strategic Options for Remedying a Cost
Disadvantage
Company’s competitiveness on cost depends on
how efficiently it manages the value chain activities
relative to how well competitors manage theirs
There are three main areas in a company’s value
chain where important differences in the cost of
competing firms can occur
1. A company’s own activity segment
2. Supplier’s part of the industry value chain
3. The forward channel portion of the industry chain
50. 4-50
Remedying an Internal Cost Disadvantage
1. Implement the use of the best practices throughout the company
particularly for high cost activities
2. Try to eliminate cost-producing activities altogether by revamping the value
chain
- cutting out low value added activities
- bypassing the value chains and associated costs of distribution by
marketing directly to end users
3. Relocate high cost manufacturing activities to other geographic areas
4. Whether certain internally performed activities can be outsourced more
cheaply than they could be done in-house
5. Invest in productivity enhancing, cost saving technological improvements
6. Find ways to detour around the activities or items where costs are high
7. Redesign the product and/or some components to facilitate speedier and
more economical manufacture or assembly
8. Try to make up the internal cost disadvantage by reducing the costs in
supplier or forward channel portions of the industry value chain – usually
the last resort
51. 4-51
Remedying a Supplier-Related Cost
Disadvantage
Pressurizing suppliers for lower prices
Switching to lower-priced substitute inputs
Collaborating closely with suppliers to identify
mutual cost saving opportunities
Just in time deliveries from supplier can lower:
- company’s inventory and logistic costs
- supplier can economize on their warehousing,
shipping, and production scheduling costs
Companies may find it cheaper to integrate
backward
52. 4-52
Remedying a Cost Disadvantage Associated with
Activities Performed by Forward Channel Allies
1. Pressurize dealer distributors and other
forward channel allies to reduce their costs
and markups
2. Work closely with forward channel allies to
identify win-win opportunities to reduce
costs
3. Change to a more economical distribution
strategy, including switching distribution
channels or integrating forward into
company-owned retail outlets
54. 4-54
Overall competitive position involves
answering two questions:
How does a company rank relative
to competitors on each important
factor that determines market success?
Does a company have a net
competitive advantage or disadvantage
vis-à-vis major competitors?
Question 4: Is the Company Stronger
or Weaker than Key Rivals?
55. 4-55
Based on results of both industry and
competitive analysis and an evaluation of a
company’s competitiveness, what items
should be on a company’s “worry list”?
Requires thinking strategically about
Pluses and minuses in the industry
and competitive situation
Company’s resource strengths and weaknesses
and attractiveness of its competitive positionA “good” strategy must address “what to do”
about each and every strategic issue!
Question 5: What Strategic Issues
Merit Managerial Attention?