Analyzing the Firm - Analyzing the Firm Analyzing the Firm...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Analyzing the Firm Analyzing the Firm Rod Thirion Strengths Strengths Textbook Definition Are resources and capabilities that allow the firm to complete important tasks. Another way of saying… Something a firm does well or an attribute that enhances its competitiveness Examples of Strengths Examples of Strengths Patents Strong brand names Good reputation among customers Cost advantages from proprietary know­ how Exclusive access to high grade natural resources Favorable access to distribution networks Weaknesses Weaknesses Textbook Definition A company’s resource and capability deficiencies that make it difficult for the firm to complete important tasks. Another way of saying… A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage. Examples of Weaknesses Examples of Lack of patent protection A weak brand name Poor reputation among customers High cost structure Lack of access to the best natural resources Lack of access to key distribution channels Resources Resources Tangible Market share Financial resources Exclusive contracts Patents and trade secrets Operational efficiency Operational capacity Technology Resources Resources Intangible Company culture Company image Position on the experience curve Brand awareness Brand image The question is: are we creating value for our customers? Can be measured by price they are willing to pay. Capabilities & Company Capabilities & Company Competencies Come from skills, expertise, and experience (human capital) Accumulation of learning over time Selecting people with knowledge and skills Upgrading or expanding individual abilities Cooperation to create organizational ability A conscious effort to create intellectual capital Buildup of proficiency in performing an activity Competencies, Core Competencies Competencies, Core Competencies & Distinctive Competencies Competencies are the product of organizational and learning. They represent real proficiency in performing internal activities Core competencies are well­performed internal activities critical to a company’s competitiveness and profitability Distinctive competencies are competitively valuable activities a company performs better than its rivals Value Chain Consists of activities undertaken to design, produce, market, deliver, and support the products or services offered Consists of a linked set of value­creating activities performed internally Two types of activities: Primary activities – where most of the value for customers is created Support activities – facilitate performance of the primary activities Value Chain Value Chain Source: Crafting and Executing Strategy 14th edition, Arthur A. Thompson, et all. McGraw­Hill Irwin, 2006. Benchmarking Benchmarking Identify best practices in performing an activity Understand the best practices in performing an activity Learn how other firms achieve lower costs Take action to improve company’s cost competitiveness Benchmarking Questions How do other companies? How much do they pay? 1. 2. 3. 4. 5. 6. 7. 8. Purchase of materials Payment of suppliers Management of inventories Getting new products to market Performance of quality control Filling and shipping of customer orders Training of employees Processing of payrolls Outsourcing Outsourcing Acquiring a capability from an external supplier that contributes to creating value for the customer. Or at least that is what is should do. Real World Example: http://www.youtube.com/watch?v=lKI­GzlDRqw Reasons For Outsourcing Reasons For Outsourcing 1. 2. 3. 4. 5. 6. 7. 8. 9. Improve Company Focus Access to World­Class Capabilities Accelerate Reengineering Benefits Share Risks Free Resources for Other Purposes Make Capital Funds Available Reduce and Control Operating Costs Resources Not Available Internally Function Difficult to Manage or Out of Control Competitive Advantage Competitive Advantage “What business strategy is all about; what distinguishes it from all other kinds of business planning ­ is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as effectively as possible, a sustainable edge over its competitors.” Keniche Ohnae ...
View Full Document

Ask a homework question - tutors are online