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Resources and capabilities Strategic management Prof.E.Vatchkova.

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1 Resources and capabilities Strategic management Prof.E.Vatchkova

2 Auditing internal resources Resource analysis Checklist for Resource analysis Ranking strengths, weaknesses and distinctive competencies Strategic analysis – practical recommendations for strategists

3 Key questions What kind of groups of resources does the company possess? What kind of goals are they to meet? What are the main requirements to them?

4 Definition A SEARCH FOR SIGNIFICANT RESOURCE STRENGTHS AND WEAKNESSES What is possible in product or market position terms given the constrains of resource availability The process should indicate how resources might be redirected to improve systems goals achievements

5 Growth, survival - efficiency, survival - the control of the environment - the improvement of the organization’s profit performance

6 To build up a comprehensive picture, to look for A BETTER RESOURCE POSITION

7 Checklist for RA 1.Which resources do we have? 2. How effective (efficient) is our resource utilization? 3. How flexible are our resources? 4. How balanced are they? 5. How effective is our organizing “fit’? 6. What is the extent and nature of any resource slack witing the organization ? 7. What is the nature and extent of our strategic standing?


9 Opera tions Marke ting Finan ce Perso nnel R&DOther s Physi cal resour ces Machines Buildings Materials Location Stock Products Services Patents Licenses Warehouse s Cash Debtors Stock Equity Loans LocationSize of R&D Design Location of buildings HR Operatives Support Salesman Marketing staff Customers Sharehold ers Bankers Adaptabilit y Location Number Age Profile Scientists Technologi sts Designers Manageme nt skills Syste ms Quality control Production Production planning Service systems Distributio n channels Purchasing Costing Manageme nt accounting Cash Working agreement s Rewards Training Project assessmen ts Planning and control informatio n Intang ibles Team Spirit Social capital Brand name Good will Market informatio n Contacts Image Image in the city OC Immage Social Responsibi lity Know howImmage Location

10 1. AVAILABILITY – which resources do we have? A detailed list of tangible and intangible ones Amended and extended to fit the specific situation

11 2. EFFECTIVENESS – how effective (efficient) their utilization is? Measured by a range of ratios: Employees to sales Profit to sales Rejects to output Absenteeism to potential staff days Compared against: Industry norms Competitors ratios Benchmarks Trends over time

12 The trends over time to insight into the: Levels of performance achieved Areas of strength and weakness Areas for productivity improvement activity

13 3. FLEXIBILITY the effectiveness, with which resources can be redeployed and/or rearranged to meet the environmental situations

14 4. BALANCE equilibrium, proportion of parts, harmony between resource characteristics

15 5. FIT – all the organizing components should be mutually supportive of each other People Jobs Systems Structure Strategy

16 6. SLACK resources levels are higher than needed, more than “Just enough”

17 7. STRATEGIC STANDING to define strategic drivers, which contribute to the attainment of strategic position

18 STRATEGIC CAPABILITY Threshold resources Unique resources Inadequate resources Core competencies


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