Intrernal_Scanning_and_Organizational_Analysis

Intrernal_Scanning_and_Organizational_Analysis - Internal...

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Internal Scanning: Organizational Analysis
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Internal Audit Information from: Management Marketing Finance/accounting Production/operations Research & Development Management information Systems Parallel process with external audit
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Organizational analysis Internal strategic factors – those critical strengths and weakness that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats Internal resources are more important than external factors
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Core and Distinctive Competences Resources are an organization’s assets and are thus the basic building blocks of the organization. Capabilities refer to corporation’s ability to exploit its resources. A competency is a cross-functional integration and coordination of capabilities.
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Core and Distinctive Competences A core competency is a collection of competencies that crosses divisional boundaries, is widespread within the corporation, and is something that the corporation can do exceedingly well. When core competencies are superior to those of the competition, they are called distinctive competences .
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VRIO framework of analysis: 1. Value : Does it provide competitive advantage? 2. Rareness : Do other competitors possess it? 3. Imitability : Is it cost for others to imitate? 4. Organization : Is the firm organized to exploit the resource? If answer is yes for a particular competency, it is considered to be a strength and thus a distinctive competence.
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Applying the VRIO Framework in theory: Does the resource enable the firm to exploit an external opportunity or neutralize an external threat? the practical: Does the resource result in an increase in revenues, a decrease in costs, or some combination of the two? (Levi’s reputation allows it to charge a premium for its Docker’s pants) The Question of V alue
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Applying the VRIO Framework if a resource is not rare, then perfect competition dynamics are likely to be observed a resource must be rare enough that perfect competition has not set in thus, there may be other firms that possess the resource, but still few enough that there is scarcity Several pharmaceuticals sell cholesterol-lowering drugs, but the drugs are still scarce—look at prices The Question of R arity
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Applying the VRIO Framework the temporary competitive advantage of valuable and rare resources can be sustained only if competitors face a cost disadvantage in imitating the resource intangible resources are usually more costly to imitate than tangible resources and bundles of resources are more costly than single resources Harley-Davidson’s styles may be easily imitated, but its reputation cannot The Question of I mitability
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This note was uploaded on 01/20/2012 for the course SM 402 taught by Professor Staff during the Fall '11 term at Ball State.

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Intrernal_Scanning_and_Organizational_Analysis - Internal...

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