Internal Orgn.

Analysis / Organization Analysis

Resources

Resource
A

resource can be an asset, skill, process or knowledge controlled by an organisation. Organisation resources includes both those that are owned by the orgn. And those that can be accessed by the orgn.

Resources can be Tangible or intangible: -

Resource - Types
Tangible: can be seen and quantified like building, machinery, equipment etc. Intangible: which can not be quantified for eg. Employees knowledge, trust, culture, ideas and capacities.

Resources and competitive advantage

Resource Advantage can be divided into two categories: 1. Durability: short run or long run or whether their value will be appreciated or depreciated 2. Resource Scarcity 3. Substitutability 4. Imitability Transparency Transferability Replicability

Resource Advantage
Imitability is the rate at which a firms resource are copied or duplicated by the competitors. Competitors abilities to imitate includes copying the product design, features, marketing strategies, scouting talented employees, suppliers or market intermediaries.

Resource Advantage - Imitability

Transparency: Transparency is the degree of a companys abilities, competencies and talents that indicates vulnerability for copying. Transferability: it is the speed at which the competitors can copy the capabilities of firm. For e.g.. Product design, technology etc. E.g.. Biscuits Replicability: replicability is the competitors ability to use copied resource for the success of firm. For e.g.. Movie making

Capability

Capabilities
Organisational Capabilities are the skills that a firm employs to transform inputs into output. It reflects ability of firm to combining assets, people and processes to bring about the desired results. According to Hamel, Organisational competence as a Bundle of skills and technologies which are integrated in people skills and business processes.

Core Competence

Core Competence
Core competencies are a companys resources and capabilities that enable the firm to gain competitive advantage over its competitors. Core competencies enables the firm to formulate strategies that compliments their capabilities and in turn they achieve their goals by earning profits, market share and satisfy their employees. For eg. Vodafone with their technology and financial resource tapped the rural market and gain significant market share.

Capabilities Functional Area

Financial Capability Marketing Capability Operations Capability Personnel Capability Information Management Capability General Management Capability

Financial Capability
Financial capability factors relate to the availability, usage and management of funds and all allied aspects that have a bearing on an organisations capacity and ability to implement its strategies.

Strengths supporting Financial Capability

Access to financial resources Amicable relationship with financial institutions High level of credit worthiness Efficient capital budgeting system Low cost of capital as compared to competitors High level of shareholders confidence Tax benefits due to government policies

Marketing Capability
Marketing capability factors relate to the pricing, promotion and distribution of products and services and all the allied aspects that have bearing on organisations capacity and ability to implement strategies:

Strengths supporting Marketing Capability

Wide variety and good quality products Sharply focused positioning Low prices as compared to competitors products Effective distribution system Effective sales promotion High profile advertising Effective marketing management system

Operations Capability
Operations capability factors related to the production of products or services, the use of material resources.

Strengths supporting Operational Capability

High level of capacity utilization Favorable plant location High degree of vertical integration Reliable sources of supply Effective control of operational costs Existence of good inventory control system Availability of high caliber R & D Personnel Technical Collaborations with reputed firms

Personnel Capability
Personnel Capability factors related to the existence and use of human resources and skills.

Strengths supporting Personnel Capability

1. 2. 3. 4. 5. 6. Organization perceived as fair and model employer Excellent training opportunities and facilities Congenial working environment Highly satisfied and motivated workforce High level of orgn. Loyalty Low level of absenteeism

Information Management Capability Information management capability factors relate to the design and management of the flow of information from outside into and within an orgn. For the purpose of decision making.

Strengths supporting IT Capability

Ease and convenience of access to information sources Widespread use of computerized information systems Availability and operators ability to use high tech equipment Positive attitude of sharing information Wide coverage and networking Presence of foolproof information security systems Top managements understanding of and support to IT and its application within organisation.

General Management Capability Refers to the integration, coordination and direction of the functional capabilities towards common goals. Important factors includes:-

Strengths that support Gen. Mgnt. Capability

Effective system for corporate planning Control, Reward and Incentive systems for managers Entrepreneurial Orientation and Risk Taking Propensity Good rapport with government. Favorable corporate image

SWOT Analysis
The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.

Swot Analysis
Environmental Scan / \ Internal Analysis External Analysis / \ / \ Strengths Weaknesses Opportunities Threats SWOT Matrix

Strengths
A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include: patents strong brand names Product Differentiation

Weaknesses
The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses: lack of patent protection a weak brand name poor reputation among customers high cost structure lack of access to the best natural resources lack of access to key distribution channels

Weakness
In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

Opportunities
The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: an unfulfilled customer need arrival of new technologies loosening of regulations removal of international trade barriers

Threats
Threats Changes in the external environmental also may present threats to the firm. Some examples of such threats include: shifts in consumer tastes away from the firm's products emergence of substitute products new regulations increased trade barriers

SWOT MATRIX / TOWS Matrix

To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is shown below:
Opportunities Strengths Weakness S - O strategies W - O strategies Threats S - T strategies W - T strategies

SWOT Matrix
S-O strategies pursue opportunities that are a good fit to the company's strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.

Value Chain Analysis

Value is the amount, buyer desire to pay for what a firm provides to them in the form of product / service / product cum service. Value chain analysis views the business as a process of activities from the stage of raw material to the final stage, delivery of product to the end customer and then after sale services. It examines and enhances the efforts of business operations that contribute to the value of customers. Aims at 1. Reduce the cost 2. Enhancing value by contributing to quality, convenience and comfort

Value Chain Activities

Primary Activities Support Activities

Primary Activities
Inbound Activities: concerned with receiving, storing, issuing all kinds of raw materials and spare parts to mfrg sector., material handling, inventory management, stock control, storage, transportation.

Primary Activities
Operations: process through which raw materials are transformed into finished products. Aims at creation and innovation for reducing cost and improving quality. 1) Product quality 2) Process, technology, scheduling of activities

Outbound Activities
Concerned with distribution of good to Ultimate customer (direct marketing) or marketing intermediaries (indirect marketing)

Activities includes: storage, Warehousing, Transportation, Negotiations with M. I. Concepts like Internet based Marketing which results in reduction of cost.

Primary Activities
Marketing and Sales: deciding upon pricing strategies, product mix, promotion mix, target market and channels of distribution. Also includes strategy like targeting total market or specified market, direct marketing marketing, online marketing

Telephone bookings, free home deliveries, online reservations have reduced cost and increased convenience.

After Sale Services

Pre sale and post sale services are also valued by the customer. Firms having good after sale services always enjoy better reputation among customers.

Support Services
Technology : Quality of Technology Human Resource: Skill of employees, commitment General Management: ability to forcast, strategy formulation and implementation, employee empowerment, leadership style Infrastructure: financial resources, infromation system, public relations, govt machinery

Environment Threat and Opportunity Profile (ETOP)

Analysis of environment information, data, and factors and determining opportunities and threats require a systematic technique. Given by William F. Glueck Represents impact of each environmental factor like Societal, Technological, Competitor, Economic on the organisation.

ETOP
Continued emphasis on infrastructural facilities including telecommunications Increase in educational level and income levels. Increase in business activity Establishment of financing activities Increased computerisation Shortage of computer operators and engineers Economic liberalisation allowed private banks to operate and compete Shift from present banks to the newly established banks with modern facilities Source of technology becoming obsolete Less competition from existing banks Strength of foreign banks in terms of technology, people and funds