Beruflich Dokumente
Kultur Dokumente
Goals
L01: The benefits and limitations of SWOT analysis
Benefits
Limitations
Stimulate self-reflection and group
Cannot show how to achieve a
discussions about how to improve
competitive advantage
their firm and position it for
success
SWOT cannot be an end in itself, temporarily raising awareness about
important issues but failing to lead to the kind of action steps necessary to
enact strategic change
o Strengths may not lead to an advantage
If a firm builds its strategy on a capability that cannot, by itself,
create or sustain competitive advantage
o Focus on the external environment is too narrow
Strategists tend to focus their sights too narrowly on current
customers, technologies, and competitors
Fail to notice important changes on the periphery of their
environment that may trigger the need to redefine industry
boundaries and identify a whole new set of competitive
relationships
o Gives a one-shot view of a moving target
Focuss too much of a firms attention on one moment in time
Static analysis techniques do not reveal the dynamics of the
competitive environment
o Overemphasizes a single dimension of strategy
Firms can become preoccupied with a single strength or a key
feature of the product or service they are offering and ignore
other factors needed for competitive success
By itself, rarely helps a firm develop competitive advantages
that it can sustain over time
Value-chain Analysis: A strategic analysis of an organization that uses valuecreating activities
Primary Activities: Sequential activities of the value chain that refer to the physical
creation of the product or service, its sale and transfer to the buyer, and its service
after sale, including inbound logistics, operations, outbound logistics, marketing and
sales, and services
Support Activities: Activities of the value chain that either ad value by themselves
through important relationships with both primary activities and other support
activities; including procurement, technology development, human resource
management, and general administration
Marketing and Sales: Activities associated with purchases of products and services
by end users and the inducements used to get them to make purchases
Service: Actions associated with providing service to enhance or maintain the value
of the product
Procurement: The function of purchasing inputs used in the firms value chain,
including raw materials, supplies, and other consumable items as well as assets such
as machinery, laboratory equipment, office equipment, and buildings
Technology Development: Activities associated with the development of new
knowledge that is applied to the firms operations
Human Resource Management: Activities involved in the recruiting, hiring,
training, development and compensation of all types of personnel
L03: How value-chain analysis can help managers create value by investigating
relationships among activities within the firm and between the firm and its customers
and suppliers
1) Interrelationships among activities within the firm
2) Relationships among activities within the firm and with other stakeholders
(e.g., customers and suppliers) that are part of the firms expanded value
chain
The Prosumer Concept: Integrating Customers into the Value Chain
o A key to success for some leading-edge firms is to team up with their
customers to satisfy their particular need(s)
o Including customers in the actual production process can create
greater satisfaction among them. Has potential to result in significant
cost savings and to generate innovative ideas for the firm, which can
be transferred to the customer in terms of lower prices and higher
quality products and services
o In how a firm views its customers, the move to create the prosumer
stands in rather stark contrast to the conventional marketing approach
in which the customer merely consumers the products produced by the
company.
Loyalty programs and individualized relationship marketing
Consumer is the boss P&G
Applying the Value Chain to Service Organizations
o Difference between manufacturing and service is in providing a
customized solution rather than mass production as is common in
manufacturing
o Work process (operation) involves the application of specialized
knowledge based on the specifics of a situation (inputs) and the
outcome that the client desires (outputs)
o Application of the value chain to the service suggests that the valueadding process may be configured differently depending on the type of
business a firm is engaged in
o Activities that may only provide support to one company may be
critical to the primary value-adding activity of another firm
o Examples:
Retail
Partnering with vendors Purchasing goods
Managing and distributing inventory Operating stores
Marketing and selling
o
o
Engineering
Research & development Engineering Designs &
solutions Marketing & sales Sales
o Transformation process is the engineering itself
and innovative designs and practical solutions are
the outputs
Examples:
Favorable
Technical and
o Outstanding
manufacturing
scientific skills
customer
locations
Innovation
service
State-of-the-art
machinery and
equipment
Technological
Trade secrets
Innovative
production processes
Patents, copyrights,
trademarks
Organizational
Effective strategic
planning processes
Excellent evaluation
and control systems
capacities
Reputation
Brand name
Reputation with
customers for
quality and
reliability
Reputation with
suppliers for
fairness, nonzero-sum
relationships
o
o
Excellent
product
development
capabilities
Innovativenes
s of products
and services
Ability to hire,
motivate, and
retain human
capital
L05: The four criteria that a firms resources must possess to maintain a sustainable
advantage and how value created can be appropriated by employees and managers
Is the resource or
Implications
capability
Valuable?
Neutralize threats and exploit opportunities
Rare?
Not many firms possess
Difficult to imitate?
Physically unique
Path dependency (how accumulated over time)
Causal ambiguity (difficult to disentangle what
it is or how it could be re-created)
Social complexity (trust, interpersonal
relationships, culture, reputation)
Difficult to substitute?
No equivalent strategic resources or
capabilities
The generation and distribution of a firms profits: Extending the RBV of
the firm
RBV of the firm is useful in determining when firms will create competitive
advantages and enjoy high levels of profitability, though not developed to
address how a firms profits will be distributed to a firms management and
employees or other stakeholders
Four factors help explain the extent to which employees and managers will be
able to obtain a proportionately high level of the profits they generate:
o Employee bargaining power
L06: The usefulness of financial ratio analysis, its inherent limitations, and how to
make meaningful comparisons of performance across firms
Two approaches to use when evaluating a firms performance:
o 1) Identifies a firm is performing according to its balance sheet, income
statement, and market valuation
Must take account the firms performance from
Historical perspectives Provides a means of
evaluating trends
Industry norms Firms current ratio or profitability
may appear impressive at first glance but may pale
when compared with industry standards or norms
Key competitors Competition is more intense among
competitors within groups than across groups. Gain
valuable insights into a firms financial and competitive
position if you make comparisons between a firm and its
direct rivals
o 2) Takes a broader stakeholder view