Evaluating the Company’s Internal Situation Is the Firm’s Strategy Working? Improving financial condition / profitability Revenue growth, stock price, earnings improvement Improving market standing Customer retention, customer growth, process improvement Financial analysis – Example: Costco – 2013 Company A’s financials? SWOT analysis Value chain analysis Benchmarking Competitive strength analysis
Typical Resource Strengths / Capabilities : Competence, Core Competence, Distinctive Competence Skills, expertise ex: product innovation, customer service, etc. Physical assets Natural resources, facilities, etc. Human assets Highly motivated workers, effective groups, etc. Organizational assets Proprietary technology, distribution network, etc. Intangible assets Brand name, goodwill, etc. Competitive advantage Leading market share, product line breadth, R&D leader, etc. Alliances / partnerships
Assessing How Competitive (Essential) the Resource is Does it have competitive value? Does it help to win customers from rivals? Do rivals have it also? It may be necessary to survive but will not win. Can it be easily copied? Competitive value is increased when resource is rare Are rival resources more competitive? Can they make it the same quality for lower cost?
Typical Resource / Capability Weaknesses Resources not developed Resources do not match industry KSFs Strategy not clear Performance shortfalls – financial, market, etc. Weak brand / reputation
Typical Opportunities Rivals’ missteps / mistakes Increasing product demand New demographic trends Unserved / underserved geographic markets New / developing product lines New technologies Potential organizations with needed expertise alliances / partnerships integration (backward, forward) – aquire, merge
Typical External Threats Intense rivalry Slowing / shrinking market growth Pressure from all five industry forces Adverse demographic changes / trends Dynamic regulatory / political environment
The Customer Value Proposition: Value Chain Analysis Nike Value Chain Analysis