ILRHR4640 Lecture 2- Analyzing Internal Environments Ch. 4

ILRHR4640 Lecture - Chapter 4 and SWOT2 Conducting Internal Analysis Dr Daniel Cohen ILRHR 4640 1 Learning Outline Learning Outline o o What is an

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Unformatted text preview: Chapter 4 and SWOT2 Conducting Internal Analysis Dr. Daniel Cohen ILRHR 4640 1 Learning Outline Learning Outline o o What is an internal analysis? • Define internal analysis • Define Core Competencies • Describe the relationship between organizational Describe resources, organizational capabilities, core competencies, and distinctive capabilities. competencies, • Define and Explain organizational strengths and Define weaknesses How to do an internal analysis • Explain how to analyze strengths and weaknesses. • Describe the steps in a capabilities assessment profile. 2 Learning Outline (contd.) Learning Outline o Why do an internal analysis? • • Explain the four criteria of sustainable competitive advantage. Explain competitive Discuss why an internal analysis is important. 3 What is an Internal Analysis? What is an Internal Analysis? Internal Analysis Identifies and evaluates resources, capabilities, Identifies and core competencies and Looks at the organization’s o o o o Current vision Mission Strategic objectives Strategies 4 The Role of Strengths and Weaknesses The Role of Strengths and Weaknesses Strengths: Resources that an organization possesses and capabilities that an organization has developed. Weaknesses: The firm’s resource and capability deficiencies that make it difficult for the firm to complete important tasks 5 Framework for Evaluation Framework for Evaluation While examining the strengths and weaknesses of a company, make sure to evaluate: Core competencies and processes Financial condition Management and culture of organization Cost structure of operations Brand name and image Pipeline of R&D projects Acumen of employees 6 Core Competencies Core Competencies What’s a core competency? What makes a CC distinctive? Examples? 7 For a CC to be an effective as a For a CC to be an effective as a Strategy: Imitability Durability Appropriability Sustainability Competitive Superiority 8 The Strategic Role of Organizational Resources and The Strategic Role of Organizational Resources and Organizational Capabilities Performance Results Competitive Advantage Distinctive Core Competencies Organizational Resources Financial assets Physical assets Human resources Intangible assets StructuralOrganizational Capabilities Bundled Resources Organizational processes and routines Accumulated knowledge Actual work activities Core Competencies 9 From Capabilities to From Capabilities to Distinctive Capabilities & Core Competencies Distinctive Organizational Capabilities • • • • Special and unique capabilities Distinguish from competitors Sustainable competitive advantage Outperform competition Distinctive Organizational Capabilities Organizational Capabilities Core Competencies Organizational Capabilities • Org. capabilities come first • Fundamental building block for developing core competencies • Organizational processes and routines to get the work done • • • • • • Core Competencies Not a source of competitive advantage Develop distinctive organizational capabilities Improve and enhance organizational capabilities Fundamental skills and capabilities Exploitable by organization Major value-creating skills and capabilities 10 From Capabilities to From Capabilities to Distinctive Capabilities & Core Competencies Distinctive Core Competencies Special and unique capabilities Distinguish from competitors Sustainable competitive advantage Outperform competition • • • • Distinctive Core Competencies Organizational Capabilities Core Competencies Organizational Capabilities • Org. capabilities come first • Fundamental building block for developing core competencies • Organizational processes and routines to get the work done • • • • • • Core Competencies Not a source of competitive advantage Develop distinctive organizational capabilities Improve and enhance organizational capabilities Fundamental skills and capabilities Exploitable by organization Major value-creating skills and capabilities 11 Four Criteria of Sustainable Four Criteria of Sustainable Competitive Advantage Valuable Help a firm neutralize threats or exploit opportunities Not possessed by many others Historical: A unique and valuable org culture or brand name Ambiguous Cause: the causes and uses of competence unclear Socially Complex: interpersonal relationships, trust, and friendship among managers, suppliers, and customers Rare Costly­to­Imitate Non­substitutable: no strategic equivalent 12 Value Chain Analysis Value Chain Analysis The premise behind value chain analysis is that The customers demand value from goods and services they obtain they Customer value Product is unique and different Product is low priced Quick response to specific or distinctive customer needs A value chain is a systematic way of examining value systematic organization’s functional activities organization’s 13 Why Do an Internal Analysis? Why Do an Internal Analysis? 1. 2. Identify Strengths and Weaknesses It’s needed for making good strategic It’s selection and implementation decisions selection 14 Chapter Four and SWOT 2 Questions 15 ...
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This note was uploaded on 03/18/2009 for the course ILRHR 4640 taught by Professor Cohend during the Spring '09 term at Cornell University (Engineering School).

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