CHAPTER 5 Internal Scanning Organizational Analysis 1 ResourceBased

CHAPTER 5 Internal Scanning: Organizational Analysis 1

Resource-Based Approach to Organizational Analysis Internal strategic factors -– Critical strengths and weaknesses that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats 2

Resource-Based Approach to Organizational Analysis • Resources • Capabilities • Competency • Core competency • Distinctive competency 3

Core and Distinctive Competencies VRIO Framework -–Value –Rareness –Imitability –Organization 4

Resource-Based Approach to Organizational Analysis 5 -Step Approach Strategy Analysis -1. Identify and classify resources 2. Combine strengths into capabilities 3. Appraise profit potential of capabilities 4. Select strategy that best exploits 5. Identify resource gaps invest in weaknesses 5

Continuum of Sustainability 6

Sustainability of Advantage Durability -– Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete Imitability -– Rate at which a firm’s underlying resources and capabilities can be duplicated by others 7

Sustainability of Advantage Core Competency can be imitated -–Transparency –Transferability –Replicability 8

Business Models Company’s method for making money in the current business environment. 9

Business Models Types of Models -–Customer Solutions Model –Profit Pyramid Model –Multi-Component System/Installed Base Model –Advertising Model –Switchboard Model 10

Business Models Types of Models -–Time Model –Efficiency Model –Blockbuster Model –Profit Multiplier Model –Entrepreneurial Model –De Facto Standard Model 11

Value-Chain Analysis Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers 12

Value-Chain Analysis Typical Value Chain for a Manufactured Product 13

Corporate Value-Chain Analysis • Primary activities • Support activities 14

Corporation’s Value Chain 15

Scanning Functional Resources & Capabilities Basic Organizational Structures -–Simple structure –Functional structure –Divisional structure –Strategic business units (SBU’s) –Conglomerate structure 16

Basic Organizational Structures 17

Corporate Culture Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another 18

Strategic Marketing Issues –Market Position & Segmentation –Marketing Mix –Product Life Cycle –Brand & Corporate Reputation 19

Strategic Financial Issues –Financial leverage –Capital budgeting 20

Strategic Research & Development Issues –R&D Intensity –Technological Competence –Technology Transfer 21

Technological Discontinuity 22

Strategic Human Resource Management Issues HRM – –Increasing use of teams –Union relations –Temporary workers –Quality of work life –Human diversity 23

Internal Factor Analysis Summary Table 24