Prentice Hall, Inc. © STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 5 Internal Scanning: Organizational Analysis

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Resource-Based Approach to Organizational Analysis Resources Capabilities Competency Core competency Distinctive competency

Prentice Hall, Inc. © Core and Distinctive Competencies VRIO Framework -- –Value –Rareness –Imitability –Organization

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Continuum of Sustainability

Prentice Hall, Inc. © Sustainability of Advantage Durability -- –Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete

Prentice Hall, Inc. © Sustainability of Advantage Imitability -- –Rate at which a firm’s underlying resources and capabilities can be duplicated by others

Prentice Hall, Inc. © Sustainability of Advantage Core Competency can be imitated -- –Transparency –Transferability –Replicability

Prentice Hall, Inc. © Business Models Company’s method for making money in the current business environment.

Prentice Hall, Inc. © Business Models Types of Models -- –Customer Solutions Model –Profit Pyramid Model –Multi-Component System/Installed Base Model –Advertising Model –Switchboard Model

Prentice Hall, Inc. © Business Models Types of Models -- –Time Model –Efficiency Model –Blockbuster Model –Profit Multiplier Model –Entrepreneurial Model –De Facto Standard Model

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Value-Chain Analysis Typical Value Chain for a Manufactured Product

Prentice Hall, Inc. © Corporate Value-Chain Analysis Primary activities Support activities

Prentice Hall, Inc. © Corporation’s Value Chain

Prentice Hall, Inc. © Scanning Functional Resources & Capabilities Basic Organizational Structures -- –Simple structure –Functional structure –Divisional structure –Strategic business units (SBU’s) –Conglomerate structure

Prentice Hall, Inc. © Basic Organizational Structures

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Strategic Marketing Issues –Market Position & Segmentation –Marketing Mix –Product Life Cycle –Brand & Corporate Reputation

Prentice Hall, Inc. © Product Life Cycle

Prentice Hall, Inc. © Strategic Financial Issues –Financial leverage –Capital budgeting

Prentice Hall, Inc. © Strategic Research & Development Issues –R&D Intensity –Technological Competence –Technology Transfer

Prentice Hall, Inc. © Technological Discontinuity

Prentice Hall, Inc. © Strategic Human Resource Management Issues HRM – –Increasing use of teams –Union relations –Temporary workers –Quality of work life –Human diversity

Prentice Hall, Inc. © Internal Factor Analysis Summary Table