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Chapter Four - Chapter Four Evaluating Company Resources...

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Chapter Four Evaluating Company Resources and Competitive Capabilities What Company Situation Analysis Involves 1. In evaluating a company’s internal situation and market position, it is important to Conduct a SWOT analysis; Assess the company’s competitive strength vis-à-vis rivals; Determine how well the firm’s present strategy is working and why; Identify the strategic issues the company faces. 2. Which of the following is not a component of company situation analysis? a. Evaluating how well is the present strategy is working. b. Environmental scanning and driving forces analysis. c. An assessment of whether the company’s costs and prices are competitive. d. Evaluating the company’s competitive strength and competitive position. e. Pinpointing what strategic issues the company’s management needs to address. Evaluation of How Well a Company’s Present Strategy Is Working 3. Assessing a company’s situation from a strategic perspective should logically begin with An identification of the present strategy; How well it is working as measured by key performance indicators; 4. Good evidence of how well a firm’s present strategy is working includes the trend in the firm’s profits and return on investment; whether its market share is rising or falling; whether its sales revenues are growing faster or slower than the industry as a whole; its image and reputation with customers; the size of the firm’s profit margins relative to other rivals. SWOT Analysis Company Resources Strengths and Weakness 5. A company strengths are a function of Whether it is higher up on the experience curve and thereby has above-average profit margin; Its skill and important expertise, its collection of human and organizational assets; An achievement or attribute that puts the company in a position of market advantage; Its partnerships or alliances with other organizations having expertise or capabilities that enhance its own competitiveness. How strongly differentiated its products are from those of rivals, and the length of its value chain relative to that of key rivals. 6. Company strengths and capabilities can arise from The regularity and effectiveness with which different parts of the organization team together and collaborate on such things as continuous product innovation, shortening the time it takes to bring new products to market, and improving customer service. Partnering with key suppliers or others having valuable expertise and technological know-how; Possessing competitively valuable core competencies; Such intangibles as a well-known brand name, a positive work climate and culture, and a loyal,
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dedicated work force.
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