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Internal Analysis by David (p.114-149) (Management (Controlling…
Internal Analysis
by David (p.114-149)
Key Internal Forces
Distinctive Competences
Firms Strengths That Are Difficult To Emulate
ID By Internal Audit
Management, Marketing, Finance, Production, R&D
Pros
Appreciate Issues, Concerns And Needs Of All The Functional Areas, Improve Communication, Coordination, Relationships Between Functional Areas (Functional Ratio Analysis)
Resource-Based View RBV
Characteristics
Focused On Competitive Advantages
Efficiency And Effectiveness In Firms Resources
Rare, Hard To Imitate, Not Easily Substitutable
Organizational Performance
Internal Resources
Physical
Equipment, Technology, Machines
Human
Employees, Experience, Skills
Organizational
Structure, Planning Process, Patents, Trademarks
Resources Exploit Opportuities And Neutralize Threats
Strategy And Culture
Organizational Culture
. Pattern Of Behavior Developed By An Organization
Taught To New Members.
Deals With External Adaptation And Internal Integration
Organization Personality
Can Support Strategic Management
Cultural Products. Values, Beliefs, Rituals, Stories
Foreign Cultures
Religion, History, Culture, Relationship Dynamics, Paradigms, Traditions
Management
Planning
Functions
, Prepares For Unexpected Difficulties, Maximum Effect
Planning. Effective Tasks For Desired Objectives
Include
Forecasting, Objectives, Devising Strategies, Developing Policies, Setting Goals
Organizing
Include
Managerial Activities (Structure Task And Authority Relationships), Job Descriptions, Specifications Design And Analysis,, Coordination
Motivating
Includes
: Shapes Human Behavior, Leadership, Communication, Work Group, Delegation, Job Enrichment Satisfaction Fulfilment, Morale (Employee And Managerial)
Staffing
Include
Wage And Salary Administration, Employee Benefits, Interviewing, Hiring, Career Development, PR.
Controlling
Activities
Directed Towards Ensuring Desired Results
Include
Control
Quality, Financial, Sales, Inventory, Expense, Rewards And Sanctions
Marketing
Definition
Customer Needs
Process
Define, Anticipate, Fulfil
Functions
Customer Analysis
Consumer Needs, Desires And Want
Activities
Surveys, Evaluating Market Positioning Strategies, Developing Customer Profiles, Strategies For Market Segmentation
Selling Products/ Services
Activities
Advertising, Sales Promotion, Publicity, Sale Force Management, Customer And Dealer Relations
Product And Service Planning,
Includes
Product And Brand Positioning, Devising Warranties, Packaging
Product
Options, Features, Stile, Quality
Techniques
Test Marketing. Test Alternative Marketing Plans And Forecast Future Sales Of New Products
Pricing
Affected By
Consumers, Governments, Suppliers, Distributors, Competitors
Include
Discounts, Credit Terms, Conditions Of Sale
Distribution
Warehousing, Distribution Channels, Coverage, Retail Site Locations, Sales Territories, Inventory Levels And Location
Marketing Research
Definition
Systematic Gathering, Recording, Analysing Of Data About Problems Of Marketing
, Opportunity Analysis
Involves
Assessing The Costs, Benefits And Risks Associated With Marketing Decisions
Cost/Benefit Analysis
Steps
Compute Total Costs Associated With A Decision
Estimate The Total Benefits
Compare The Costs With The Benefits
Finance
Involves
Liquidity, Leverage, Working Capital, Profitability, Asset Utilization, CashFlow
Decisions
Investment
Capital Budgeting
Financing, Best Capital Structure, Examine Methods For Raising Capital.
Financial Ratios
Debt To Equity And Debt To Total Assets Ratio
Dividend
% Of Earning Paid To Stockholders, Stability Over Time, Repurchase Of Stock
Ratios
Earnings Per Share, Dividends Per Share, Price Earnings
Basic Types Of Financial Ratios
Source
Income Statement And Balance Sheet
Types
Liquidity Ratios
Definition
Abiity To Meet Maturing Short Term Obligations
Current Ratio, Acid Test
Leverage.
Definition
Level Of Debt Financing
Debt To Total Assets Ratio, Debts To Equity Ratio, Long Term Debt To Equity, Times Interést Earned
Activity
Inventory Turnover, Fixed Assets Turnover, Total Assets Turnover, Accounts Receivable Turnover, Average Collection Period
Profitability Ratios
Measures Management Effectiveness By Sales And Investments
Gross Profit Margin, Net Profit Margin, ROA, ROE, EPS, Price Earnings Ratio
Growth Ratios
Definition
Ability To Maintain $ Position In The Growth Of Economy And Industry
Sales, Net Income, Earnings Per Share, Diviends Per Share
Production/Operations
Activities That Transform Input Into Goods And Services
Basic Functions
Process. Design Of The Physical Production
Capacity. Optimal Output Levels For The Organization
Inventory. Level Of Raw Materials, Work In Process And Finished Goods
Workforce. Managing The Skilled, Unskilled, Clerical And Managerial Employees
Quality. Ensuring High Quality Goods And Services
Research And Development
Focused On
Developing New Products, Improve Product Quality, Manufacturing Process To Reduce Costs. Integrated And Coordinated Across Departments And Divisions
Budget R&D
Financing As Many Project Proposals As Possible
Using A % Of Sales Method.
Budgeting the Same As Competitors
Deciding How Many New Products Are Needed
Types
Internal
External Independent Researches
Management Information Systems
Purpose
: Improve The Performance Of An Enterprise By Quality Of Managerial Decisions
Collects
Codes, Stores, Synthesizes And Presents Information
Input: Data
Output: Printouts, Written Reports, Tables, Charts, Graphs
Uses
Hardware, Software, Models For Analysis, Database
Functions
Collects, Categorize And File Data
Strategic Planning Software
CHECKMATE.
Personal Computer Software Performs Planning Analysis And Generates Strategies
Swot, Internal-External Analysis And Grand Strategy Matrix
Promotes
Communication, Understanding, Creativity And Forward Thinking
Value Chain
Value Chain Analysis
Determines Costs. Activities From Raw Materials Purchased To Manufacturing Products To Marketing
Process
Divide Operations Intro Specific Activities
Attach A Cost To Each Activity (Terms Of Time And Money)
Convert Cost Data Into Information By Looking Competitive Cost Strengths And Weaknesses
Internal Factor Evaluation Matrix IFE
Summarizes And Evaluates Strengths And Weaknesses In The Functional Areas Of A Business
Steps
Assign A Weight From 0.0 (Not Important) To 1.0. Importance Of The Factor To Being Succesfull In The Industry. All Weight = 1.0.
Assign 1-4 Rating Each Factor Of Weakness (Major Weakness=1), (Minor Weakness =2) (Minor Strength =3), (Major Strength =4).
Multiply Each Factors Weight By Its Rating.
Sum Scores For Each Variable
