Internal Analysis

1
Chapter 7
Internal Analysis
2
We have met the enemy and he is us. - Pogo
3
Self-conceit may lead to self-destruction. -
Aesop The Frog and the Ox
4
The fish is last to know if it swims in
water. - Chinese proverb
5
Performance Measures Reflecting Long-Term
Profitability
Long Term Profits
Customer Satisfaction/ Brand Loyalty
Current Performance
Product/Service Quality
Brand/Firm Associations
Relative Cost
New Product Activity
Manager/employee Capability and Performance
Figure 7.1
6
Relative Cost vs. Relative Performance -
Strategic Implications

• Change
• Design
• Manufacturing/Systems
• Ignore

• Value Analysis
• Raise prices
• Promote
• Cost Reduction

Our Component is...

• Value Analysis
• De-emphasize
• Upgrade

• Value Analysis
• Emphasize/promote
• Leave it alone

Figure 7.2
7
Determinants of Strategic Options and Choices
Past and Current Strategies
Strategic Choices
Strategic Problems
Organizational Capabilities/Constraints
Financial Capabilities/Constraints
Strengths/Weaknesses
Figure 7.3
8
Structuring Strategic Decisions
Organizational Strengths and Weaknesses
Competitor Strengths and Weaknesses

• Strategic Decision
• Strategic Investment
• Functional Area Strategies
• Sustainable Competitive Advantage

Market Needs, Attractiveness, and Key Success
Factors
Figure 7.4
9
The Market Attractiveness-Business Position Matrix
Invest/ Grow
Selective Investment
Harvest/ Divest
Figure 7.5
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The Growth-Share Matrix
Problem Children
Stars
Cash Cows
Dogs
Figure 7.6
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Evaluating Ability to Compete

• Distribution
• Technology skills
• Patents
• Marketing
• Flexibility

• Organization
• Growth
• Share by segment
• Customer loyalty
• Margins

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Evaluating Market Attractiveness

• Price levels
• Profitability
• Technology
• Governmental regulations
• Sensitivity to economic trends

• Size
• Growth
• Customer Satisfaction levels
• Competition quantity, types, effectiveness,
  commitment