Organizational Analysis and Competitive Advantage
A resource-Based Approach to Organizational analysis- Vrio
identifying, developing, and taking advantage of an organiza- tion’s resources and competencies.
Core and Distinctive Competencies
A competency is a cross-functional integration and coordination of capabilities. For example, a competency in new product development in one division of a corporation may be the consequence of integrating information systems capabili- ties, marketing capabilities, R&D capabilities, and production capabilities within the division.
A core competency is a collection of competencies that crosses divisional boundaries, is widespread within the corporation, and is something that the corpora- tion can do exceedingly well.
In general, the more core competencies are used, the more refined they get, and the more valuable they become.
VRIO framework
Valuable
Rareness
Imitability
Organization
A core competency can be easily imitated to the extent that it is transparent, transferable, and replicable.
Business Models
Customer solutions model
Profit pyramid model
Multicomponent system/installed base model
Advertising model
Switchboard model
Time model
Efficiency model
Blockbuster model
Profit multiplier model
Entrepreneurial model
De facto industry standard model
Value Chain Model
linked set of value-creating activities that begin with basic raw mate- rials coming from suppliers, moving on to a series of value-added activities involved in producing and marketing a product or service, and ending with distributors getting the final goods into the hands of the ultimate consumer.
upstream
down- stream.
Coorporate Value Chain Analaysis
- Examine each product line’s value chain interms of the various activities involved in producing that product or
service
- Examine the “linkages” within each product line’s value chain
- Examine the potential synergies among the value chains of different product lines or business units
Scanning functional resources and capabilities
The simplest way to begin an analysis of a corporation’s value chain is by carefully examining its traditional functional areas for potential strengths and weaknesses.
Basic Organizational Structures
Simple structure
Functional structure
Divisional structure
Strategic business units (SBUs)
Conglomerate structure
Culture
Corporate culture fulfills several important functions in an organization:
- Conveys a sense of identity for employees
- Helps generate employee commitment to something greater than themselves
- Adds to the stability of the organization as a social system
- Serves as a frame of reference for employees to use to make sense of organizational activities and to use as a guide for appropriate behavior.
Stategic Marketing Issues
Market Position and Segmentation
the selection of specific areas for marketing concentration and can be expressed in terms of market, product, and geographic locations.
Marketing mix
the particular combination of key variables under a corpora- tion’s control that can be used to affect demand and to gain competitive advantage.
Product life cycle
a graph showing time plotted against the sales of a product as it moves from introduction through growth and maturity to decline
Brand and Corporate Reputation
(1) stakeholders’ perceptions of a corporation’s ability to produce quality goods
(2) a corporation’s prominence in the minds of stakeholders.
Strategic Financial Issues
Financial Leverage
(the ratio of total debt to total assets) is helpful in describing how debt is used to increase the earnings available to common shareholders.
Capital Budgeting
the analyzing and ranking of possible investments in fixed assets such as land, buildings, and equipment in terms of the additional outlays and additional receipts that will result from each investment.
Strategic research and development R & D issues
R&D Intensity, Technological Competence, and Technology Transfer
a principal means of gaining market share in global competition
A company’s R&D unit should be evaluated for technological competence in both the development and use of innovative technology
A company should also be proficient in technology transfer, the process of taking a new technology from the laboratory to the marketplace
R&D Mix
Most corporations will have a mix of basic, product, and process R&D, which varies by industry, company, and product line. The balance of these types of research is known as the R&D mix and should be appropriate to the strategy being considered and to each product’s life cycle.
Impact of Technological Discontinuity on Strategy
Strategic Operation Issues
Experience Curve
The experience curve suggests that unit production costs decline by some fixed percentage (commonly 20%–30%) each time the total accumulated volume of production in units doubles
Flexible Manufacturing for Mass Customization
The use of Computer-Assisted Design and Computer-Assisted Manufacturing (CAD/CAM) and robot technology means that learn- ing times are shorter and products can be economically manufactured in small, customized batches in a process called mass customization—the low-cost production of individually customized goods and services
STRATEGIC HUMAN RESOURCE MANAGEMENT (HRM) ISSUES
Increasing Use of Teams
Union Relations and Temporary/Part-Time Workers
Quality of Work Life and Human Diversity
STRATEGIC INFORMATION SYSTEMS/TECHNOLOGY ISSUES
Impact on Performance
Supply Chain Management
The Strategic Audit: A Checklist for Organizational Analysis
SYNTHESIS OF INTERNAL FACTORS (IFAS)
This IFAS (Internal Factor Analysis Summary) Table is one way to organize the internal factors into the generally accepted categories of strengths and weaknesses as well as to examine how well a particular company’s management is responding to these specific factors in light of the perceived importance of these factors to the company.