BMGT 495 firm environment internal analysis 2011

BMGT 495 firm environment internal analysis 2011 - INTERNAL...

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© Copyright 2009 INTERNAL ANALYSIS Dr. Knight BMGT 495: Business Policies Spring 2010
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© Copyright 2009 Internal analysis Internal analysis provides a comparative look at a firm’s capabilities What are the firm’s strengths? What are the firm’s weaknesses? to competitors (or potential competitors)?
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© Copyright 2009 What can we learn from internal analysis? Internal analysis helps a firm: Determine if its resources and capabilities are likely sources of competitive advantage Establish strategies that will exploit any sources of competitive advantage Determine if the firm lacks any resources/capabilities needed to compete effectively
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© Copyright 2009 What we learn from external and internal analyses Examine opportunities and threats Examine unique resources, capabilities, and competences (sustainable competitive advantage)
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© Copyright 2009 Michael Phelps Sources of Competitive Advantage Why is Phelps such a dominant swimmer? Would he be as dominant in other sports such as football? Soccer? Gymnastics?
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© Copyright 2009 CAN PORTER’S FIVE FORCES EXPLAIN WHY … Southwest is the only consistently profitable major U.S. airline? Wal-Mart rolls on while K-Mart declared bankruptcy? New upscale French restaurants enter and exit the D.C. market on a regular basis, yet you still have to call a month ahead to get a reservation at L’Auberge Chez Francois.
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© Copyright 2009 INDUSTRY MATTERS, BUT COMPANY STRATEGY AND EXECUTION MATTER MORE Variance decomposition of business unit return on assets for 100 U.S. manufacturing firms representing 160 industries Source: Jaime Roquebert et al., “Markets vs. Management: What ‘Drives’ Profitability?” Strategic Management Journal , Vol. 17 (8), 1996 Macroeconomic and industry effects Business unit effects Corporate effects
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Copyright 2009 WHAT DRIVES SUPERIOR PERFORMANCE? –Innovate • Willingness to pay Cost • Create new markets –Leverage bargaining power/market position Leverage resources, relationships and other assets Out-execute others Create value Willingness to pay Value Value Cost Cost
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BMGT 495 firm environment internal analysis 2011 - INTERNAL...

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