1. 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

2. 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

3. 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?

4. Typical Resource / Capability Weaknesses
Resources not developed
Resources do not match industry KSFs
Strategy not clear
Performance shortfalls – financial, market, etc.
Weak brand / reputation

5. 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

6. Typical External Threats
Intense rivalry
Slowing / shrinking market growth
Pressure from all five industry forces
Adverse demographic changes / trends
Dynamic regulatory / political environment

7. The Customer Value Proposition: Value Chain Analysis
Nike Value Chain Analysis