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Defining the Organization's Strategic Direction (Strategic Intent…
Defining the Organization's Strategic Direction
Assessing the Firm's Current Position
External Analysis
Porter's Five Forces
Degree of existing rivalry
Threat of potential entrants
Bargaining power of suppliers
Threat of substitutes
Threat of buyers
Role of Complements
Stakeholder Analysis
Who ?
Requires what ?
What resources do they contribute ?
What claims are they likely to make ?
Internal Analysis
SWOT - helpful to consider each element of the value chain
Assess which strengths have the potential to be a sustainable competitive advantage (rare, valuable, durable, not-imitable)
Good is difficult to imitate if: Tacit & path dependent & socially complex & casually ambiguous
Core Competencies & Capabilities
Set of integrated & harmonized abilities (distinguish firm in the marketplace
Combine multiple skills
Several c.c. may underlie a business unit
Several business units may draw from the same c.c.
C.C. should
Be a significant source of competitive advantage
Cover a range of businesses
Be hard to imitate for competitors
Risk of Core Rigidities
Excel at activity - can become over-committed & right
Incentives & culture may reward current competencies while thwarting development of new competencies
Dynamic capabilities
- Competencies that enable the firm to quickly respond to change -- (e.g. set of abilities that enable it to rapidly deploy new product development teams for new opportunity
Strategic Intent
Long-term goal (10-20y)
Ambitious , builds upon & stretches firm's c.c.
Draws from all levels of the organization
Establishes clear milestones
Firms must identify resources & capabilities needed to
close gap between strategic intent & current position
Balanced Scorecard
- effective performance measurement tool
(Financial, Customer, Internal perspective & Innovation and Learning)