BA_315_LN_9B_EVALUATING__COMPANY_RESOURCES__AND_COMPETIT

BA_315_LN_9B_EVALUATING__COMPANY_RESOURCES__AND_COMPETIT -...

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1 E E V V A A L L U U A A T T I I N N G G C C O O M M P P A A N N Y Y R R E E S S O O U U R R C C E E S S A A N N D D C C O O M M P P E E T T I I T T I I V V E E C C A A P P A A B B I I L L I I T T I I E E S S Lecture Notes #9B BA 315: Economy, Industry, and Competitive Analysis Source: Chapter 4, Industry and Competitive Analysis : A Primis created by Ali Emami from: Thompson and Strickland. Strategic management: Concepts and Cases , 13 th Edition, Irwin/McGraw-Hill New York. 2003. Screen graphics created by: Jana F. Kuzmicki, PhD, Mississippi University for Women Department of Finance Charles H. Lundquist College of Business University of Oregon
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2 Lecture Outline ± SWOT Analysis ± How Well the Company’s Present Strategy Is Working Î Resource Strengths and Weaknesses Î Opportunities and Threats ± Strategic Cost Analysis and Value Chains ± Assess a Firm’s Competitive Position ± Identify Strategic Issues
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3 Company Situation Analysis: The Key Questions 1. How well is firm’s present strategy working? 2. What are the firm’s resource strengths and weaknesses and its external opportunities and threats? 3. Are firm’s prices and costs competitive? 4. How strong is firm’s competitive position relative to rivals? 5. What strategic issues does firm face?
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4 Question 1: How Well is the Present Strategy Working? ± Two steps involved Î Determine current strategy of company Î Examine key indicators of strategic and financial performance What is the Strategy? ± Identify competitive approach Î Low-cost leadership Î Differentiation Î Focus on a particular market niche ± Determine competitive scope Î Stages of industry’s production/distribution chain Î Geographic coverage Î Customer base ± Identify functional strategies ± Examine recent strategic moves
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5 Key Indicators of How Well the Strategy is Working ± Trend in sales and market share ± Acquiring and/or retaining customers ± Trend in profit margins ± Trend in net profits, ROI, and EVA ± Overall financial strength and credit ranking ± Efforts at continuous improvement activities ± Trend in stock price and stockholder value ± Image and reputation with customers ± Leadership role(s) -- technology, quality, innovation, e-commerce, etc.
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6 Question 2: What Are the Firm’s Strengths, Weaknesses, Opportunities and Threats ? ± S W O T represents the first letter in Î S trengths Î W eaknesses Î O pportunities Î T hreats ± For a company’s strategy to be well-conceived, it must be matched to both Î Resource strengths and weaknesses Î Best market opportunities and external threats to its well-being SW OT
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7 Identifying Resource Strengths and Competitive Capabilities ± A strength is something a firm does well or a characteristic that enhances its competitiveness Î Valuable competencies or know-how Î Valuable physical assets Î Valuable human assets Î Valuable organizational assets Î Valuable intangible assets Î Important competitive capabilities Î An attribute that places a company in a position of market advantage Î
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BA_315_LN_9B_EVALUATING__COMPANY_RESOURCES__AND_COMPETIT -...

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