1 Bruce Bowhill University of Portsmouth ISBN: © 2008 John Wiley & Sons Ltd.

Chapter 15 Internal Appraisal of the Organisation © 2008 John Wiley & Sons Ltd.

3 Market analysis and appraisal of products and services Achieving competitive advantage through: –Identifying the attributes that add value for customers –Strategic positioning of the organisation Identifying the sources of competitive advantage –Undertaking a resource audit –Identifying organisational competencies – value chain analysis Benchmarking © 2008 John Wiley & Sons Ltd.

4 Market analysis and appraisal of products and services –1) The product life cycle © 2008 John Wiley & Sons Ltd.

5 Implications of the product life cycle –Cash flows –Profits –Strategy Build Hold Harvest © 2008 John Wiley & Sons Ltd.

6 2) Monitoring competitive position – product portfolio analysis © 2008 John Wiley & Sons Ltd.

7 Strategic implications of the BCG matrix –It is likely to be desirable to have a balanced portfolio. For example, too many ‘questions marks’ (usually early stage of the life cycle) could lead to a cash flow problem. –Build, hold or harvest strategies. Problems of the BCG matrix –High or low market share? –Dangers of prescriptive use of the matrix –Limited number of factors considered –Market segment that is chosen © 2008 John Wiley & Sons Ltd.

8 Achieving competitive advantage 1) Identifying the attributes that customers value Product/ service attributes –Functionality –Quality –Price –Time Customer relationships Image © 2008 John Wiley & Sons Ltd.

9 2) Achieving competitive advantage through strategic positioning –generic strategies (Porter) Cost leadership - price Differentiation – unique dimension that can command a premium price Focus - Confrontation strategy © 2008 John Wiley & Sons Ltd.

10 Sources of competitive advantage 1) Resource audit –Financial performance and funds –Physical –Human resources –Intangible assets © 2008 John Wiley & Sons Ltd.

11 2) Competencies of the organisation © 2008 John Wiley & Sons Ltd.

12 Cost drivers –All activities add cost. Eliminate activities that do not add value and reduce expenditure where little value is added. Value drivers –Actions that lead to the provision of features that add value such as on-time delivery, product quality or durability. Identify linkages between activities –Linkages between the activities of an organisation –Supplier and customer linkages © 2008 John Wiley & Sons Ltd.

13 Comparative analysis –Competitive benchmarking –Functional or generic benchmarking –Internal benchmarking © 2008 John Wiley & Sons Ltd.

14 Competitive benchmarking © 2008 John Wiley & Sons Ltd.