Market environment Flashcards
What is the process of internal analysis?
- Resources Audit
- Competencies: In separate activities through linked activities
- Core competencies: To out-perform the competition; to create new opportunity
- Assessing Balance: Resources, competencies, business units
- Identify key issues: SWOT and CSF
- Understanding strategic capabilities
Why is internal analysis a crucial part of developing a strategy?
It helps the organization to identify what it is capable of – what skills and assets it possesses. Understanding this will help the organization identify which strategies it is capable of implementing.
What is a resource audit?
Identifies the resources that are available to an organization and seeks to start the process of identifying competencies.
It attempts to assets relative strength or resource base–> quality, nature, and extent they are unique
What is M’s Model?
Suggests items in position audit can be categorized into factors beginning with the letter “M”
What are the factors in M’s model?
Manpower (HR) Money Management Machinery Markets Materials Methods Management Information Makeup
What are the alternative headings the factors in M’s model can be grouped under?
- physical or operational resources
- Human Resources
- Financial Resources
- Intangibles
Resources are combined together to achieve a competence. What is a competence?
A group of abilities, resources, or skills that enable the organization to act effectively.
What are core competencies?
Things the organization is able to do that are difficult for competitors to emulate.
They form the basis of competitive advantage.
They are referred to by Johnson and Scholes as “the order winners”.
What are threshold competencies?
Things that you do well simply enable you to compete in the market.
They do not give competitive advantage –if they are not satisfied, you will not even be considered by the customer.
They are referred to as “the order qualifiers”.
What is a competence audit?
Analysis of what competencies the organization has, as well as how well resources are being deployed to create them.
How would one categorize competencies as core or threshold?
Look at historical data
Look at industry norms
Benchmarking exercises (Usually undertaken by specialist teams)
What are critical success factors (CSFs)?
The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the business.
They are the vital areas where “things must go right” and where the business must outperform its competitors
What we have to be good at:
Should tie into corporate objectives
Problem: often vague
What are Key Performance Indicators (KPIs)?
Measurements for whether their CSFs are being met.
Rockhart claims there are four sources for CSFs, what are they?
- Industry
- The organization itself and its situation within the industry
- The wider environment – economy, political factors, consumer trends
- Temporal Organization Factors-unusually causing concern because they are unacceptable or need attention
How are CSF’s and competences slightly different?
CSF’s are what the organization NEEDS to be good at in order to compete in the market.
Competences are what the organization IS good at.
Note: they should be as closely aligned as possible to be successful
What are value drivers?
Activities or features that enhance the perceived value of a product or service by customers and which therefore create value for the producer.
Can be tangible or intangible
What is Porter’s value chain?
A means by which the activities within and around the organization are identified and then related to the assessment as a competitive strength.
Resources are of no value unless they are deployed into activities that are organized into routines and systems.
These activities are involved in the physical creation of the product, its transfer to the buyer and any after-sales service.
What are the five primary categories in Porter’s value chain?
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
Explain inbound logistics in Porter’s value chain.
Activities concerned with receiving, storing, and distributing the inputs to the product.
Includes: materials and handling, stock control and transport
Explain operations in Porter’s value chain.
transform these various inputs into a final product
i.e. machining, packing, assembling, testing, and control equipment
Explain outbound logistics in Porter’s value chain.
Relate to collecting, storing and distributing the product to buyers
Explain marketing and sales in Porter’s value chain.
Provide the means whereby consumers and customers are made aware of the product and transfer is facilitated.
Includes: sales admin, advertising, selling, and so on.
Explain service in Porter’s value chain.
Relates to those activities which embrace or maintain the value of a product such as installation, repair, training, and aftersales service.
Each of the primary activities in Porter’s value chain are linked to support activities. These support activities can be divided into four areas, what are they?
- Procurement
- Technology Development
- Human Resources Management
- Infrastructure
Explain procurement in Porter’s value chain.
The processes for acquiring the various resource inputs to the primary activities - not the resources themselves. As such it occurs though the organization.
