1. Internal Environment Analysis
Mahesh Amarasiri MBA,FCMA,ACIM,B.Sc (Eng)

2. Tools Used to Identify Strengths and Weeknesses
Value Chain Analysis
BCG Matrix
Product Life Cycle Analysis
Resource Analysis

3. The Value Chain Exhibit 3.6
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, Used with permission of The Free Press, a division of Simon & Schuster, Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.
Exhibit 3.6

4. Value Chain and Value Network
To diagnose strategic capability
To understand how value is created or lost in terms of the activities undertaken
The value chain describes the activities within
and around an organisation which together
create a product or service

5. Value Chain Analysis
Identifies clusters of activities providing particular benefit to customers
Highlights activities which are less efficient and which might be de-emphasised or outsourced
Requires managers to think about the role of such activities
Can be used to identify the cost and value of activities

6. The Value Network Exhibit 3.7
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, Used with permission of The Free Press, a division of Simon & Schuster Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.
Exhibit 3.7

7. The Value Network The value network Specialisation of roles
Set of inter-organisational links/relationships necessary to create a product or service
Specialisation of roles
Underpins excellence in creating best-value products
Need to understand whole process
Where cost/value is created in supply/distribution chains
How to manage links to improve customer value
How product quality is a function of linked activities of manufacturer, suppliers and distributors

8. The Value Network – Key Questions (1)
Where are cost and value created?
Which activities are vital to an organisation?
Retain direct control of core capabilities
Outsource less important activities
Where are the profit pools?
Potential profits at different parts of the value network
Availability of competences to compete in these areas

9. The Value Network – Key Questions (2)
Make or buy?
Outsourcing
Develop competence in influencing performance of other organisations
Who are the best partners?
What kind of relationships are required?

10. Value Chain Analysis-Google

11. BCG Matrix
Mahesh Amarasiri MBA, FCMA, ACIM,B.Sc ( Eng)
4/10/2015

12. Sales & profits ($) Time Product Life Cycle Introduction Growth
Maturity
Decline

13. Resources- an organization’s assets
Resource Analysis
Resources- an organization’s assets
Tangible
Intangible
Capabilities- a corporation’s ability to exploit its resources
Identify and classify resources in terms of strengths and weaknesses
Combine the firm’s strengths into specific capabilities and core competencies
Appraise profit potential- Are there any distinctive competencies?
Identify resource gaps and invest in upgrading weaknesses