Internal Analysis

1
Internal Analysis

• BUSI 7130/7136
• Dr. Shook

2
Agenda

• Internal Resource Analysis
• Crown Cork Seal Case

3
(No Transcript)
4
(No Transcript)
5
The Source of
6
The Source of
7
Value Chain Analysis
helps to identify which resources and
capabilities can add value
Firm Infrastructure
Human Resource Management
Support Activities
MARGIN
Technological Development
Procurement
Service
Inbound Logistics
Outbound Logistics
Marketing Sales
MARGIN
Operations
Primary Activities
8
The Source of
The Source of
9
The Source of
The Source of
10
What a firm Does...
Core Competencies
that is Strategically Valuable
Core Competencies must be
Valuable
Capabilities that either help a firm to exploit
opportunities to create value for customers or to
neutralize threats in the environment
11
What a firm Does...
Core Competencies
that is Strategically Valuable
Core Competencies must be
Valuable
Capabilities that either help a firm to exploit
opportunities to create value for customers or to
neutralize threats in the environment
Rare
Capabilities that are possessed by few, if any,
current or potential competitors
12
Core Competencies
that is Strategically Valuable
Core Competencies must be
Valuable
Capabilities that either help a firm to exploit
opportunities to create value for customers or to
neutralize threats in the environment
Rare
Capabilities that are possessed by few, if any,
current or potential competitors
Costly to Imitate
Capabilities that other firms cannot develop
easily, usually due to unique historical
conditions, causal ambiguity or social complexity
13
What Criteria Make Core Competencies Costly to
Imitate?
Unique Historical Conditions
An unusual evolutionary pattern of growth may
contribute to the development of competencies in
a manner that is unique to those particular
circumstances
14
What Criteria Make Core Competencies Costly to
Imitate?
Unique Historical Conditions
An unusual evolutionary pattern of growth may
contribute to the development of competencies in
a manner that is unique to those particular
circumstances
15
What Criteria Make Core Competencies Costly to
Imitate?
Unique Historical Conditions
An unusual evolutionary pattern of growth may
contribute to the development of competencies in
a manner that is unique to those particular
circumstances
Causal Ambiguity
This occurs when competitors are unable to detect
how a firm uses its competencies as a foundation
for competitive advantage
16
What Criteria Make Core Competencies Costly to
Imitate?
Unique Historical Conditions
An unusual evolutionary pattern of growth may
contribute to the development of competencies in
a manner that is unique to those particular
circumstances
Causal Ambiguity
This occurs when competitors are unable to detect
how a firm uses its competencies as a foundation
for competitive advantage
Social complexity
Occurs when the firm's capabilities are the
result of complex social phenomena, such as
interpersonal relationships, trust and
friendships among managers or a firms reputation
with suppliers and customers
17
What a firm Does...
Core Competencies
that is Strategically Valuable
Core Competencies must be
Valuable
Capabilities that either help a firm to exploit
opportunities to create value for customers or to
neutralize threats in the environment
Rare
Capabilities that are possessed by few, if any,
current or potential competitors
Costly to Imitate
Capabilities that other firms cannot develop
easily, usually due to unique historical
conditions, causal ambiguity or social complexity
Organization
Firm is organized to take effectively utilize the
resources.
18
The Source of
The Source of
The Foundation of
19
The Source of
The Source of
The Foundation of
20
The Source of
The Source of
The Foundation of
The Pathway to
21
Implications of VRIO
22
Implications of VRIO
23
Implications of VRIO
24
Implications of VRIO