Internal Analysis

1. BA 495: Business Strategy - Spring Term 2017
“Team Brooke”
Drew Bugni, Tatyana Collier, Katlin Combest,
Ryan Ordonez, Brooke Rawson & Yavuz Sefunc
Arte Soleil Internal Analysis

2. To gain perspective on how Arte Soleil is currently positioned in the
marketplace, we need to examine your resources, core competencies and
competitors. Our analysis will include the following:
• Review of External Analysis
• Resources
• VRIO Framework
• Weighted Competition Matrix
• Core Competencies
• Value Chain
• Strengths and Weaknesses
• Alignment of Strengths and Weakness with Opportunities and Threats
• Questions
Overview and Purpose of Internal Analysis

3. External Analysis Review
Opportunities
• Improve the socioeconomic status
and quality of neighborhood
• Leverage technology to reach
consumers
• Rising cost of rent for artists
• Increase diversity
Threats
• E-commerce sales increasing
• Rising cost of rent for artists and
real estate for consumers
• Low switching costs for buyers
• Local industry competition is high
Sources:
IBISWorld. (2017). Operating Conditions, Small Specialty Retail Stores. Retrieved April 22, 2017 from http://www.ibisworld.com;; McCann, F. (2016, March). Can Portland Artists Survive the City’s New Gilded Age?
Portland Monthly. Retrieved from https://www.pdxmonthly.com;; Monahan, R. (2016, August 19). What’s the Deal with Portland's Rising Rents? Retrieved from http://www.wweek.com

4. Resources
• Superior performance is made up of
• Visible tangible resources
• Invisible intangible resources
• Combined these resources provide the base for competitive advantage
• Resources are best evaluated through the resource-based view model

5. Tangible Resources
• Kris and Pete themselves
• Furniture
• 1,600 square foot building
• One bathroom in building
• 1,600 square foot food cart pod area
• 3,000 square foot shared parking Lot
• Audio recording equipment
• Tables and chairs for workshop and meetings
• 3 close city bus line stops
• Facebook and Twitter accounts
• https://www.facebook.com/arte.soleil
• https://twitter.com/artesoleilpdx

6. Intangible Resources
• Connections to east portland advocacy groups
• Reputation with various community leaders
• Strong connections with 6 artists that have art ready to sell
• Background understanding of art and creating
• Knowledge of food and beverage industry
• Knowledgeable regarding the psychology of behavior and teaching
• Good visibility from busy intersection (Harold and 122nd)
• Discounted lease rates

7. • A decision tree that helps evaluate resources and their
characteristics. Resources can be:
• Valuable
• Rare
• Costly to Imitate
• Organized to Capture
VRIO Framework

8. Graphic: RothaÌrmel, Frank T. "Chapter 4 Figure 4.6." Strategic Management. Second ed. New York, NY: McGraw-­Hill Education, 2017. 111. Web.
VRIO Framework

9. Weighted Competition Matrix
5 = Excellent
4 = Above average
3 = Average
2 = Below average
1 = Poor
0 = None
Sources:
“Crafty Wonderland.” Crafty Wonderland. N.p., n.d. Web. 1 May 2017.
“Twisted : Yarn, Crafts, Classes, Tea.” N.p., n.d. Web. 1 May 2017.
“Singer Hill Cafe » Art Gallery.” N.p., n.d. Web. 1 May 2017.
“Give and Take Resale | Reuse, Resell, Refresh!!” N.p., n.d. Web. 1 May 2017.
Empire, Tender Loving. “Handmade Products - Record Label.” Tender Loving Empire. N.p., n.d. Web. 1 May 2017.

10. • When a resource or capability is valuable, rare, costly to
imitate, and the firm is organized to capture its value it
becomes a core competency.
• Core competencies are essential to gaining competitive
advantage.
Core Competencies

11. Core Competencies
• Leverage low operating cost advantage
• Low price lease
• Extensive network within the Art community
• Takes years to build, difficult to imitate
• Range of knowledge in different industries
• Experience is valuable

12. Dynamic Capabilities
• Extensive network within the art community
• Ability to change availble art and workshops
• Functional and adaptable building and land

13. Value Chain - Support Activities
SUPPORT ACTIVITIES
Information System & Research & Development
● Feedback from customer
● Innovation
Human Resource
● Personal
● Training
● Staff Planning
Accounting & Finance
● Legal
● Accounting
● Financial Management
Procedures
● Supplier Management
● Funding
● Specification

14. Value Chain - Primary Activities
PRIMARY ACTIVITIES
Supply Chain
Management
Art supply
Quality control
Raw material
Operations
Packaging
Product quality
Workshops
Recording
Distribution
Inventory
management
Marketing &
Sales
Segmentation
Target Market
Brading
Advertising
Promotional
Offers
Pricing
After-Sales
Service
Customer Survey

15. • Strengths and Weaknesses come from a firm’s
resources, capabilities, and core
competencies.
• Strengths can exploit opportunities
• Weaknesses can make external threats
worse
Strengths and Weaknesses

16. • Complement products
• Coffee and beverages
• Food
• Lack of marketing
• Long term sourcing of artists and creators
• Building permits
• Few technical business strengths
Weaknesses

17. Strengths
• Low overhead
• Good location that is getting even better!
• Next to PDC development area
• PDC can help with a business plan that is very relevant to the local
community
• Call or email Nixie Stark for more information
• 503-823-0465
• starkn@pdc.us
• Leach Botanical Gardens is getting revamped
• Potential for complementary services such as a coffee cart
• 6 Artists ready to consign
• Intimate knowledge of being creators
Source: Stein, Mara. "Leach Garden Revamp Sprouts." Oregon Local News. Pamplin Media Group, 07 Feb. 2017. Web. 29 Apr. 2017.

18. Opportunities
• Improve neighborhood
• Leverage technology
• Rising rent
• Increase diversity
Threats
• E-commerce increasing
• Rising rent
• Low switching costs
• Local competition
Strengths
• Low overhead
• Location
• Potential for complementary
coffee cart service
• 6 artists ready to consign
• Knowledge
• Fund technology, online
marketing and advertising
efforts with capital that is not
slated for overhead costs. Use
these efforts to promote the
location of the business and
share your community
commitment.
• Use knowledge to counter local
competition by developing close
relationships with the artists
ready to consign, their networks
and your own. Emphasize Arte
Soleil as a cost effective
solution for artists in the
Portland area.
Weaknesses
• Complement products to attract
consumers
• Marketing
• Sourcing artists and creators
• Building permits
• Few technical strengths
• Pivot idea generation energy
towards retail and coffee cart
service combination to remove
the focus of needing to update
the building and begin serving
the community.
• Focus on promoting the business
to the right audiences to
achieve continual artist
sourcing and take consumer
attention away from e-
commerce options.
SWOT Alignment

19. Sustaining Competitive Advantage
Resources
Capabilities
Core
Competencies
Activities
Competitive
Advantage
Superior Firm
Performance
Reinvest, Hone, and Upgrade
Reinvest, Hone, and Upgrade
Graphic:
Bersin, Josh "Make Learning part of your Business Strategy: Figure 1: The Lifecycle of a Business" JOSHBERSIN, 31 July 2008 Web. http://joshbersin.com/2008/07/make-­learning-­part-­of-­your-­business-­strategy/

20. Questions? Comments?