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Assessing strategic capability - Coggle Diagram
Assessing strategic capability
Given the importance of strategic capabilities it is useful for an organisation to be able to identify the interaction of capabilities within its particular strategic and culture
Supply chain analysis
It is clear that the inputs within the supply chain will form the resources
The transformation process represents the capability of the organisation and its individuals to apply and use these resources to create a distinctive USP
The competence of the organisation and competitive advantage is evidenced by the ability to complete the supply chain by delivering goods or services to the customer or consumer
The final proof of the capability and competence of the supply chain is actually the point at which the customer or consumer pays for the goods or services and therefore funds the entire supply chain
This model can be used to assess the resources required, the capability of the organisation to apply those resources and the competence of the organisation to utilise the resources and the capability to deliver an effective business model with sustainable competitive advantage
Value chain analysis
Porter
separates the structure of the organisation into primary activities and support activities
Primary activities
Inbound logistics
Receipt, storage, stock control and transportation of the material resources required for the business operation
Operations
The transformation of the raw materials into the final product or service including manufacturing, packaging, testing and quality control
Outbound logistics
Storage and stock control of finished products together with the transportation of these products to the customer; in the case of a service rather than a product this process would include the means and location of the delivery of the service
Marketing and sales
The means through which consumers and customers are made aware of the product or service and are able to purchase it, including the selling process itself, the administration of the sales and associated advertising
Service
The enhancement addition of value to a product or service such as installation, repair, training, spares or ongoing support and consultation
Support activities
Procurement
The processes used for acquiring the resources required for primary activities
Technology development
The range of technological activities that enable a continuity of throughput within an organisation and any required specific handling and protection of a product or service flows through the organisation
Human resource management
Recruitment, managing, training, developing, rewarding of people across the organisation, including the ability to ensure that appropriate skill levels exist at core strategic points with the operational flow
Firm infrastructure
The formal systems of planning, finance, quality control, information management, governance and leadership within the organisation
Benchmarking and gap analysis
Gap analysis is an important method of enabling the people leading an organisation to determine which aspects of the operational flow, the resources and the capabilities are operating as intended and which areas may need attention - they represent the gaps between what was expected compared to what actually happened
The benefits of benchmarking can include
The alignment of performance against strategic and operational goals and objectives
The acceleration of management of change, having recongised the need for such change
The improvement of operational processes
Lynch (2015)
suggetss that benchmarking should lead to more than a simple improvement in an organisation through the correction of the perceived gaps. He suggests that the real benefit is to use the benchmarking exercise as a means of enhancing overall competitive advantage within the wider operational environment. He argues that a natural sequence should follow as a result of a benchmarking exercise
Explore the results and analyse the reasons for the differences
Redefine performance targets after discussion with key employees
Redevelop the assets and systems of the organisation using the learning from the benchmarking exercise
Redevelop new performance objectives for individuals and groups, changing expectations and attitudes to what is possible as a result of the learning from the benchmarking exercise
SWOT analysis
The resources of the organisation can be analysed to detrmine the respective strengths and weaknesses that exist
A deeper analysis will enable the organisation to understand its capabilities in the utilisation of its resources and how these capabilities are perceived and demanded by the various stakeholders (its competencies)
A variation on this suggested by
Weihrich (1982)
was to invert the acronym and terefore the analystical approach to TOWS, this approach starts with a consideration of the external environment within which the organisation is attempting to achieve its strategic objectives and then identifies the resources and capabilities required to operate within that environment. These can then be assessed against the actual strengths and weaknesses of the organisation at that point in time
The McKinsey 7S framework
The framework is based around the need to understand the alignment between seven core internal aspects of an organisation, the presumption being that such an understanding will help to deliver a strategic approach to the anticipate ddemands of the external environment
The principle that sits behind the model is that each of the seven elements is constantly interacting with each of the other elements in the daily operations of an organisation
Hard elements are easier to define and identify and are largely determined by the strategic activities of the people within the organisation
Soft elements are less tangible, are part of the culture of the organisation and are largely determined by the manner in which the people within the organisation interact and communicate
Hard elements
Strategy: the vision of acheiving sustainable competitive advantage
Structure: the organisational hierarchy and lnes of accountability
Systems: the activites, policies and procedures that enable day to day tasks to be completed
Soft elements
Style: The nature of leadership and the levels of empowerment as well as the channels of communication used by that leader
Staff: the mixture of employees and the combination of the capabilities
Skills: the specific competencies of each individual employee within the organisation
Shared values: the realisation of the culture and the general ethos of the organisation resulting from the perpetual and changing interaction of the other elements