1. Assessing Strengths and weaknesses: Doing an Internal analysis Team 5
Strategic Management
Assessing Strengths and weaknesses: Doing an Internal analysis
Team 5

2. Internal Analysis Overview
Internal Analysis – the process of evaluating an organization’s resources and capabilities.
Evaluates the organizations resources, capabilities, and core competencies
Determines their strengths and weaknesses

3. Organizational Resources
Resources (assets)
Financial - available equity (stock)
Physical - buildings
Human - skills and abilities of employees
Intangible - trademarks
Structural-cultural – culture
Competitive Advantage
Must be combined and used in some way to add value

4. Organizational Capabilities
Organizational capabilities – which are the various routines and processes that transform those inputs (resources) into outputs (products).
Change as conditions and competitors change
Organizational routines and processes – are the regular, predictable, and sequential work activities done by organizational members
Dynamic capabilities – an organizations ability to build, integrate, and reconfigure capabilities to address rapidly changing environments.

5. 4.1 Describing what an Internal Analysis is
Core Competencies: major value –creating capabilities that are essential to an organization’s business
They are not sources of competitive advantage themselves but can contribute to developing distinctive capabilities and improving other organizational capabilities.
Distinctive Organizational Capabilities: the special and unique capabilities that distinguish an organization from its competitors

6. 4.1 Describing what an Internal Analysis is
Contributes to Superior Customer value
Is difficult for competitors to imitate
Can be used in a variety of ways
Distinctive Organizational Capabilities

7. 4.1 Describing what an Internal Analysis is
The Role of Strengths and Weaknesses
Strengths - resources an organization possesses and capabilities an organization has developed, both of which can be developed, both of which can be developed into sustainable competitive advantage.
Weaknesses - resources and capabilities that are lacking or deficient and prevent the organization fro developing a sustainable competitive advantage

8. How to do an Internal Analysis
In three parts:
Organization’s work: value chain analysis
Internal audit
Capabilities assessment profile
Strengths and Weaknesses

9. Value Chain Analysis
Examining functional activities where they create value and how well they create customer value
Observe the five primary activities:
Inbound logistics
Operations
Marketing and sales
Outbound logistics
Customer service
Observe the four secondary activities:
Procurement
Technological development
Human resource management
Firm infrastructure

10. Internal Audit Six organizational functions to audit the firm:
Production-operations
Marketing
Research and Development
Financial-accounting
Management
Information systems

11. Capabilities Assessment Profile
The two phases:
Identifying distinctive capabilities
Developing and leveraging capabilities
The five steps in assessing organizational capabilities:
Preparing a current product-market profile
Identifying sources of competitive advantage and disadvantage
Describing organizational capabilities and competencies
Sorting them according to their strategic importance
Identifying and agreeing on the key competencies and capabilities

12. Strength and Weaknesses
It can be measured according to four criteria:
Past performance trends
Organizational goals
Competitor comparisons
Personal opinions of strategic decision makers or consultants

13. Internal Analysis Importance
Understanding a business in depth is the goal of internal analysis. This analysis is based on resources and capabilities of the firm.
Any analysis of company strengths should be market oriented/customer focused because strengths are only meaningful when they assist the firm in meeting customer needs.