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CHAPTER 4: THE INTERNAL ASSESSMENT B (VALUE CHAIN ANALYSIS (Process…
CHAPTER 4: THE INTERNAL ASSESSMENT B
VALUE CHAIN ANALYSIS
Process whereby a firm determine the cost associated with
purchasing raw material
manufacturing product
marketing products
an compare them to the value chain of rival firms
core competencies
value chain activity that firm perform especially well
distinctive competencies
core competencies evolve into major competitive advantage
benchmarking
analytical tool to determine whether firm's value chain activities are competitive compared to rival and thus conducive to winning in market place
IFE matrix
Steps
List key internal factors
2.Assign a weight ranging from 0 to 1
Assign a 1 to 4 rating to each factor
Multiply weight x rating
Sum the weighted scores
Benefits
summarize & evaluates major strength and weaknesses in functional area of business
provide a basis for identifying & evaluating relationship among areas
provide important info for strategy formulation
Distinctive competencies
Firm's strength that cannot be easily matched/imitated by competitors
Building comp advantage involve taking adv of distinctive competencies
Internal audit
Financial ratio analysis
Exemplifies complexity of relationships among functional areas of business
Resource based view (RBV)
Approach to competitive advantage (Internal resource more important than external resources)
Resource catrgories
Physical
human
Organizational
Empirical indicator
Rare
Hard to imitate
Not easily substitutable
Organizational strategy&culture
pattern of behavior developed by organization as it learns to cope with its external adaptation and internal integration and it is considered valid and taught to new members as the correct way to perceive, think and feel
resistant to change
may present strength and weakenesses
legend, values, belief, rite, ritual, myths, symbol, heroes