Download - Chap 4
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Evaluating Company Resources and Competitive Capabilities
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Situation AnalysisTechniques of evaluatingA companys resource capabilitiesRelative cost positionCompetitive strength compare to the rivals
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Five Questions of Situation AnalysisHow well is the companys present strategy working?
What are the companys resource strengths and weaknesses and its external opportunities and threat
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Five Questions of Situation AnalysisAre the companys prices and costs competitive?How strong is the companys competitive position relative to its rivals?What strategic issues does the company face?
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What are the Companys S, W, O, TAnalyzing a firms resource strengths and weaknesses and its external opportunities and threats is known as SWOT analysis
Through SWOT analysis it is possible to find out whether a firms business position is fundamentally healthy or unhealthy
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What are the Companys S, W, O, TThe job of the SWOT analysis is to-
Identify companys strengths and resource capabilities
Identify companys weaknesses and resource deficiencies
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What are the Companys S, W, O, TIdentify company competencies
Identify companys market opportunities
Identify the threats to companys future profitability
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companys strengths and resource capabilitiesA strength is something a company is good at doing or a characteristic that gives it enhanced competitiveness
A company may have strengths in different areas
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companys strengths and resource capabilitiesA skill or important expertise:Low-cost manufacturing capabilitiesStrong e-commerce expertiseTechnological know-howA proven track record in defect free manufacturingConsistency in customer service
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companys strengths and resource capabilitiesValuable physical assets:State-of-the-art plants and equipmentsAttractive real estate locationsWorld wide distribution facilities
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companys strengths and resource capabilitiesValuable human assets:A experience and capable workforceTalented employees in key areasMotivated and energetic employeesCutting-edge knowledge and intellectual capital
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companys strengths and resource capabilitiesValuable organizational assets:Proven quality control systemKey patentMineral rightA base of loyal customerHigh credit rating
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companys strengths and resource capabilitiesValuable intangible assets:Brand name imageCompany reputationBuyer good will
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companys strengths and resource capabilitiesCompetitive capabilitiesShort development times in bringing new products to marketA strong dealer networkStrong partnership with key suppliers
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companys strengths and resource capabilitiesAchievement or attribute that put a company in a position of market advantage:Low overall costMarket share leadershipA superior productWide product selection
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companys strengths and resource capabilitiesAlliance or cooperative venture:
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companys weaknesses and resource deficienciesA weakness is something a company lacks or does poorly in comparison to others that puts it at a disadvantage
A companys internal weaknesses can be found in different ways
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companys weaknesses and resource deficienciesDeficiencies in competitively important skills or expertise or intellectual capitalA lack of competitively important physical, organizational, or intangible assetsMissing or weak competitive capabilities is key areas
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companys weaknesses and resource deficienciesA weakness may or may not make a company competitively vulnerable, depending on how much the weakness matters in the market place and,
Whether it can be overcome by the resources and strengths in the companys possession
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company competenciesCompany competence and competitive capabilitiesIdentifying and evaluating *what a company is really good at doing *what capabilities it has for competing is a critical component of assessing a companys situation
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company competenciesA competence is the product of *learning and *experience and *represents real proficiency in performing an internal activity
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company competenciesA company competence becomes a meaningful competitive capability when customer consider the competence valuable and beneficialIt help differentiate a company from its competitorsIt enhance its competitiveness
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company competenciesFew other related issues to company competence:Core competenceDistinctive competenceCompetitive advantageCompetitive value
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Core competence
A core competence is something that a company does well relative to other internal activities
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Distinctive competence
Distinctive competence is something a company does well relative to competitors
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Core competence & Distinctive competenceWhether a companys core competence represent a distinctive competence depends on how good the competence is relative to what competitors are capable ofIs it a competitively superior competence or just a standout internal company competence
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Competitive advantageA distinctive competence empowers a company to build competitive advantage
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Competitive value
How valuable the competitive advantage is depends on the competitive value
To evaluate the competitive value of a particular companys competitive advantage it is important to address four question
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Competitive value
Is the resource hard to copy?How long does the resource last?Is the resource really competitively superior?Can the resource be trumped by different resources/capabilities of rivals?