Internal Scanning 1 Flashcards
Organizational analysis- concerned with
identifying and developing an organization’s resources and competencies
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.
Resources
Physical assets: plant, equipment, location, etc …
Human assets: employees and their skills …
Organizational assets: culture, reputation etc …
Capabilities (a corporation’s ability to exploit its resources)
Marketing capabilities
Manufacturing capabilities
HRM capabilities
Competency
Cross-functional integration and coordination of capabilities
Core competency (primary expertise)
Something that a corporation can do exceedingly well
Distinctive competency
When core competition is superior of the competition
Even though a distinctive competency is certainly considered to be a corporation’s key strength
a key strength may not always be a distinctive competency
As competitors attempt to imitate other companies competencies;
what was once a distinctive competency becomes a minimum requirement to compete in the industry. Even though the competency may still be a core competency, and thus strength, it is no longer unique. It is no longer a distinctive competency.
VRIO Framework
Value
Rareness
Imitability
Organization
value
Does it provide customer value and competitive advantage?
Rareness
Do other competitors possess it?
Imitability
Is it costly for others to imitate?
Organization
Is the firm organized to exploit the resource?
5-Step Approach Strategy Analysis –
Using Resources to Gain Competitive Advantage
Identify and classify resources
Combine strengths into capabilities
Appraise profit potential of capabilities
Select a strategy that best exploits
Identify resource gaps invest in weaknesses
How Can An Organization Gain Access to a Distinctive Competency - important
- endowment
(KeAssety patent; polaroid, Xerox…) - Acquired from someone else
(P&G bought Tursil, distribution systems) - Shared with another business
(Apple work with a design firm for the units) - Built and accumulated within the company
(Honda Motors, small with high compression ratio)
Exam question
difference between core competency and distinctive competency!
Ex: a restaurant said I make very good food at a reasonable price
What is the difference between Toyota and Ferrari?
CLUSTERS
Provide access to employees, suppliers, specialized information, complementary products, ease of comparing with others, informal information …
Sustainability of Advantage
Durability
Imitability
Explicit knowledge
Tacit knowledge
Durability
The rate at which a firm’s underlying resources and capabilities depreciate or become obsolete
Imitability
Rate at which a firm’s underlying resources and capabilities can be duplicated by others
Transparency (ability to understand) Transferability (ability to gather resources and capabilities) Replicability (imitability)
Explicit knowledge
knowledge that can be easily articulated and communicated
Tacit knowledge
Is the knowledge that is not easily communicated because it is deeply rooted in employee experience or in a corporation’s culture.
CAN BE BOTH ;
AN ADVANTAGE AND
A DİSADVANTAGE
Resource-Based Approach to Organizational Analysis
Resources Capabilities Competency Core competency Distinctive competency Durability Imitability Explicit knowledge – Tacit knowledge
BUSINESS MODEL
Company’s method for making money in the current business environment.
Is a strategic design for how a company intends to profit from its strategies, work processes, and work activities.
BUSINESS MODEL Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that
BUSINESS MODEL
A business model is a snapshot of the way a business is configured to create, deliver and capture value. Its decree is shareholder value maximization.
BUSINESS MODEL vs STRATEGY
Business models describe how a company is structured and its methods for maximizing revenues and profits. The business model is independent of competitors and the current state of the market, which is where strategy comes in.
BUSINESS MODEL vs STRATEGY 2
Important for exam
The strategy describes how the company will engage competitors, identify and segment customers, and respond to the actual market environment. Two companies employing the exact same business model may, nonetheless, see very different financial results based on their different business strategies.
BUSINESS MODEL Includes
Who the company serves
What the company provides
How the company makes money
How the company differentiates and sustains competitive advantage
How the company provides its product/service
Types of Models
Customer Solutions Model Profit Pyramid Model Multi-Component System/Installed Base Model Advertising Model Switchboard Model Time Model Efficiency Model Blockbuster Model Profit Multiplier Model Entrepreneurial Model De Facto Standard Model
company’s center of gravity
A company’s center of gravity is the part of the chain that is most important to the company and the point where its greatest expertise and capabilities lie – its core competencies.
(This does not mean that the center of gravity is where the company makes most of the profits)
