CHAPTER 5 Internal Scanning: Organizational Analysis STRATEGIC MANAGEMENT & BUSINESS POLICY 12TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER Prentice Hall 2006

Internal strategic factors -- 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 Resources Capabilities Competency Core competency Distinctive competency Prentice Hall 2006

VRIO Framework -- Value Rareness Imitability Organization Core and Distinctive Competencies VRIO Framework -- Value Rareness Imitability Organization Prentice Hall 2006

5-Step Approach Strategy Analysis -- Resource-Based Approach to Organizational Analysis 5-Step Approach Strategy Analysis -- Identify and classify resources Combine strengths into capabilities Appraise profit potential of capabilities Select strategy that best exploits Identify resource gaps invest in weaknesses Prentice Hall 2006

Continuum of Sustainability Prentice Hall 2006

Imitability -- Durability -- Sustainability of Advantage Imitability -- Rate at which a firm’s underlying resources and capabilities can be duplicated by others Durability -- Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete Prentice Hall 2006

Core Competency can be imitated -- Sustainability of Advantage Core Competency can be imitated -- Transparency Transferability Replicability Prentice Hall 2006

Company’s method for making money in the current business environment. Business Models BUSINESS MODEL: Company’s method for making money in the current business environment. Prentice Hall 2006

Types of Business Models -- Customer Solutions Model Profit Pyramid Model Multi-Component System/Installed Base Model Advertising Model Switchboard Model Prentice Hall 2006

Types of Models -- Time Model Efficiency Model Blockbuster Model Business Models Types of Models -- Time Model Efficiency Model Blockbuster Model Profit Multiplier Model Entrepreneurial Model De Facto Standard Model Prentice Hall 2006

Typical Value Chain for a Manufactured Product 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 Typical Value Chain for a Manufactured Product Prentice Hall 2006

Corporation’s Value Chain Prentice Hall 2006

Basic Organizational Structures -- Scanning Functional Resources & Capabilities Basic Organizational Structures -- Simple structure Functional structure Divisional structure Strategic business units (SBU’s) Conglomerate structure Prentice Hall 2006

Basic Organizational Structures Prentice Hall 2006

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 Prentice Hall 2006

Market Position & Segmentation Marketing Mix Product Life Cycle Strategic Marketing Issues Market Position & Segmentation Marketing Mix Product Life Cycle Brand & Corporate Reputation Prentice Hall 2006

Product Life Cycle Prentice Hall 2006

Financial leverage Capital budgeting Strategic Financial Issues Prentice Hall 2006

Technological Competence Technology Transfer Strategic Research & Development Issues R&D Intensity Technological Competence Technology Transfer Prentice Hall 2006

Technological Discontinuity Prentice Hall 2006

Human Resources Management Increasing use of teams Union relations Strategic Human Resource Management Issues Human Resources Management Increasing use of teams Union relations Temporary workers Quality of work life Human diversity Prentice Hall 2006

Internal Factor Analysis Summary Table Prentice Hall 2006