Prentice Hall, Inc. © STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 5 Internal Scanning: Organizational Analysis

Prentice Hall, Inc. © 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, Inc. © Core and Distinctive Competencies VRIO Framework -- –Value –Rareness –Imitability –Organization

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Continuum of Sustainability

Prentice Hall, Inc. © 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

Prentice Hall, Inc. © Sustainability of Advantage Core Competency can be imitated -- –Transparency –Transferability –Replicability

Prentice Hall, Inc. © Business Models Company’s method for making money in the current business environment.

Prentice Hall, Inc. © Business Models Types of Models -- –Customer Solutions Model –Profit Pyramid Model –Multi-Component System/Installed Base Model –Advertising Model –Switchboard Model

Prentice Hall, Inc. © Business Models Types of Models -- –Time Model –Efficiency Model –Blockbuster Model –Profit Multiplier Model –Entrepreneurial Model –De Facto Standard Model

Prentice Hall, Inc. © Value-Chain Analysis Typical Value Chain for a Manufactured Product Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers

Prentice Hall, Inc. © Corporation’s Value Chain

Prentice Hall, Inc. © Scanning Functional Resources & Capabilities Basic Organizational Structures -- –Simple structure –Functional structure –Divisional structure –Strategic business units (SBU’s) –Conglomerate structure

Prentice Hall, Inc. © Basic Organizational Structures

Prentice Hall, Inc. © 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, Inc. © Strategic Marketing Issues –Market Position & Segmentation –Marketing Mix –Product Life Cycle –Brand & Corporate Reputation

Prentice Hall, Inc. © Product Life Cycle

Prentice Hall, Inc. © Strategic Financial Issues –Financial leverage –Capital budgeting

Prentice Hall, Inc. © Strategic Research & Development Issues –R&D Intensity –Technological Competence –Technology Transfer

Prentice Hall, Inc. © Technological Discontinuity

Prentice Hall, Inc. © Strategic Human Resource Management Issues HRM – –Increasing use of teams –Union relations –Temporary workers –Quality of work life –Human diversity

Prentice Hall, Inc. © Internal Factor Analysis Summary Table