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CHAPTER 5Internal Scanning: Organizational Analysis
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Resource-Based Approach to Organizational Analysis
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
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Resource-Based Approach to Organizational Analysis
•Resources
•Capabilities
•Competency
•Core competency
•Distinctive competency
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Core and Distinctive Competencies
VRIO Framework --
–Value
–Rareness
–Imitability
–Organization
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Resource-Based Approach to Organizational Analysis
5-Step Approach Strategy Analysis --
1. Identify and classify resources
2. Combine strengths into capabilities
3. Appraise profit potential of capabilities
4. Select strategy that best exploits
5. Identify resource gaps invest in weaknesses
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Continuum of Sustainability
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Sustainability of Advantage
Durability --
– 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
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Sustainability of Advantage
Core Competency can be imitated --
–Transparency
–Transferability
–Replicability
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Business Models
Company’s method for making money in the current business environment.
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Business Models
Types of Models --
–Customer Solutions Model–Profit Pyramid Model–Multi-Component System/Installed Base Model–Advertising Model–Switchboard Model
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Business Models
Types of Models --
–Time Model–Efficiency Model–Blockbuster Model–Profit Multiplier Model–Entrepreneurial Model–De Facto Standard Model
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Value-Chain Analysis
Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers
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Value-Chain Analysis
Typical Value Chain for a Manufactured Product
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Corporate Value-Chain Analysis
•Primary activities
•Support activities
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Corporation’s Value Chain
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Scanning Functional Resources & Capabilities
Basic Organizational Structures --
–Simple structure
–Functional structure
–Divisional structure
–Strategic business units (SBU’s)
–Conglomerate structure
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Basic Organizational Structures
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Corporate Culture
Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another
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Strategic Marketing Issues
–Market Position & Segmentation
–Marketing Mix
–Product Life Cycle
–Brand & Corporate Reputation
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Strategic Financial Issues
–Financial leverage
–Capital budgeting
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Strategic Research & Development Issues
–R&D Intensity
–Technological Competence
–Technology Transfer
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Technological Discontinuity
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Strategic Human Resource Management Issues
HRM –
–Increasing use of teams
–Union relations
–Temporary workers
–Quality of work life
–Human diversity
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Internal Factor Analysis Summary Table