Ch. 6 Flashcards
SWOT is an acronym for the
internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm.
SWOT analysis is a historically popular technique through which managers create a quick overview of a company’s strategic situation.
An opportunity is
a major favorable situation in a firm’s environment
A threat is a
major unfavorable situation in a firm’s environment
A strength is a
resource or capability controlled by or available to a firm that gives it an advantage relative to its competitors in meeting the needs of the customers it serves
A weakness is a
limitation or deficiency in one or more of a firm’s resources or capabilities relative to its competitors that create a disadvantage in effectively meeting customer needs
Limitations of SWOT Analysis
A SWOT analysis can overemphasize internal strengths and downplay external threats
A SWOT analysis can be static and can risk ignoring changing circumstances
A SWOT analysis can overemphasize a single strength or element of strategy
A strength is not necessarily a source of competitive advantage
Value chain analysis (VCA) attempts to understand how
a business creates customer value by examining the contributions of different activities within the business to that value
VCA takes a process point of view
Primary Activities
The activities in a firm of those involved in the physical creation of the product, marketing and transfer to the buyer, and after-sales support
Support Activities
The activities in a firm that assist the firm as a whole by providing infrastructure or inputs that allow the primary activities to take place on an ongoing basis
Resource-Based View (RBV)
RBV is a method of analyzing and identifying a firm’s strategic advantages based on examining its distinct combination of assets, skills, capabilities, and intangibles
Three Basic Resources
Tangible assets are the easiest “resources” to identify and are often found on a firm’s balance sheet
Intangible assets are “resources” such as brand names, company reputation, organizational morale, technical knowledge, patents and trademarks, and accumulated experience
Organizational capabilities are not specific “inputs.” They are the skills that a company uses to transform inputs into outputs
Order of the product life cycle
Introduction, Growth, MAturity, and DECLINE
