SOM497 Business Policy

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SOM497 Business Policy Strategy
CHAPTER 5 Internal Scanning Organizational
Analysis
STRATEGIC MANAGEMENT BUSINESS POLICY 10TH
EDITION THOMAS L. WHEELEN J. DAVID HUNGER
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Organizational Analysis

• External scanning
• Scan (outside) environment to identify
  opportunities and threats
• Internal scanning of strategic factors(aka
  Organizational analysis)
• Look inside firm to identify critical strengths
  and weaknesses

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Organizational Analysis Resource-Based

• Core Distinctive Competencies
• Resources
• Capabilities
• Competency
• Core competency
• Distinctive competency

• Evaluation methods
• Firms past performance
• Firms main competitors
• Understanding environment as whole

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Core Distinctive Competencies

• VRINO Framework- help evaluate firms
  competencies
• Value
• Rareness
• Imitability
• Non-Substitutable (not in text)
• Organization

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VRIN Outcomes
Not in your textbook!
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Organizational Analysis Resource-Based

• 5-Step Approach Strategy Analysis
• Identify and classify resources
• Combine strengths into capabilities
• Appraise profit potential of capabilities
• Select strategy that best exploits
• Identify resource gaps invest in weaknesses
• Distinctive competencies can come from
• Patents
• Built over time
• Shared
• Acquired from someone else

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Sustainability of Advantage

• Durability Rate at which a firms underlying
  resources capabilities depreciate or become
  obsolete
• Imitability Rate at which a firms underlying
  resources and capabilities can be duplicated by
  others
• Transparency
• Transferability
• Replicability
• Continuum of Sustainability

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Business Models

• Firms way to make money in the current business
  environment
• Elements
• Who does the firm serve
• What does the firm provides
• How does the firm make money
• How does the firm differentiate maintain its
  competitive advantage
• How does the firm provide its products/services

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Corporate Value-Chain Analysis

• Allows firms to understand the parts of its
  operations that create value and those that do
  not
• Primary Activities
• Support Activities

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Basic Firm Structures

• Simple structure
• Functional structure
• Divisional structure
• Strategic business units (SBUs)
• Conglomerate structure

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Corporate Culture

• The set of beliefs, expectations, myths, and
  values that create a feeling of community among
  firm members
• Corporate culture is the social glue
• Strong culture can be beneficial

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Strategic Marketing Issues

• Market Position
• The selection of specific areas for marketing
  concentration (in terms of market, product, and
  geographic locations)
• Market Segmentation
• Dividing the market into segments to ID available
  niches
• Marketing Mix
• Help gain competitive advantage via
• Product
• Price
• Place
• Promotion

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Strategic Marketing Issues (cont)

• Product Life Cycle
• Pre-commercialization (not in text) ? basic
  strategy innovate
• Introduction ? basic strategy infiltrate
• Growth ? basic strategy advance
• Maturity ? basic strategy defend
• Decline ? basic strategy withdraw

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Strategic Marketing Issues (cont)

• Brand Reputation
• Name of product that identifies them
• Corporate Brand
• Name of firm serves as brand
• Strong positive reputation ? source of above
  average returns

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Other Strategic Issues

• Financial Issues
• Financial manager has to understand the firms
  sources of funds, how they are used
• Funds (short and long-term) should match the
  corporate objectives, strategies, and policies
• Research Development Issues
• The firm must also be capable of
• managing and incorporating their innovations into
  its daily operations (technology competence)
• Taking new technology from lab to marketplace
  (technology transfer)
• Firms RD intensity is a way to gain market
  share in global competition

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Next Class

• Remember there is no class on Tues, Feb 19th
  (Monday schedule)
• Next class will be on Thurs, Feb 21
• Read prepare to discuss Case 28 (Panera Bread
  Company Rising Fortunes)