Midterm: Lesson 2-3

• Internal Analysis Process


  Resource audit

  Identifying competencies

  Identifying core competencies

  Assessing the balance of the above

  Identify key issues

  Understanding strategic capability
• Resource audit

  • Ascertains the resources available to a business.
  • Evaluates the strong points of these resources in comparison to competitors.
  • Employs various models for this purpose.
• A company's internal capabilities depend on:


  Resources

  Competencies
• Resources examples


  Manufacturing resources

  Staff

  Patents
• 9 M’s model


  Materials

  Manpower

  Machinery

  Management

  Money

  Markets

  Methods

  Make-up

  Management Information
• Materials

  raw material/supplies and suppliers
• Manpower

  labour, skills and motivation levels
• Machinery


  Physical assets
• Management

  the experience and skill of the management
• Money

  investment and cash flows
• Market

  the market segments and product positioning
• Methods

  the practices employed in the business
• Make-up

  the prevalent culture and structure and intangible resources
• Management Information

  the information used by the management
• Competences

  • The ability to carry out processes successfully.
• Threshold

  • basic competences that help an organisation stay in business.
• Core

  • the things an organisation does better than its competitors.
• • Core competences do not stay constant over time.
• • Core competences will become threshold sooner or later.
• 3. COMPETENCES

  • Core competences do not stay constant over time.
  • Core competences will become threshold sooner or later.
  • There is a need to constantly monitor conditions and update new core competences.
  • Competence audit may also be carried out in addition to resource audit.
• Competence audit

  -Analyzing current competences

  -Classifying core and threshold competences

  -Monitoring the development of new competences
• 4. Critical Success Factors

  • CSFs ensure the success of the business.
  • CSFs are only limited.
  • They are essential for success against competitors.
  • The company should match resources and competences against CSFs.
  • Performance of CSFs is measured by Key Performance Indicators (KPIs).
• • CSFs differ from competences:
  • Competences are what a company currently excels at.
  • CSFs are what a company needs to excel at to achieve success in business.
• CFS’s can derived from

  • the industry
  • the company itself and its position in the market
  • the macro environment
  • organisational factors that require attention
• 5. Value Drivers

  • The activities or characteristics that boost a product's value.
  • Value is the worth attached to the product by customers.
  • Drivers may be intangible or tangible.
  • Value drivers help gain competitive advantage.
  • Porter's Value Chain model helps identify an organisation's value 
• Porter's Value Chain classifies activities into two types:

  1. Primary Activities -which involve the manufacture and sales of a product.
  2. Support Activities- support the primary
• Primary Activities Include:

  1. Inbound Logistics
  2. Operations
  3. Outbound Logistics
  4. Marketing and Sales
  5. Services
• Inbound logistics

  -receiving, storing and handling input materials.
• Operations

  -conversion of the materials into finished goods.
• Outbound logistics

  -storage and distribution of goods to customers.
• Marketing and Sales

  -creating awareness and trading the goods.
• Services

  -activities relating to completing the sale of the goods.
• Support Activities

  1. Firm Infrastructure
  2. HR Management
  3. Technology Development
  4. Procurement
• Firm infrastructure

  -the systems and structures prevalent in the organisation.
• HR management

  -recruitment, training, rewarding employees throughout the organisation.
• Technology development

  -technology requirements throughout the primary activities.
• Procurement

  -acquiring resources for the primary activities.
• VALUE SYSTEM

  The organisation's value chain plus those of the supplier and the retailer form the ______
• Value System


  -looks at how the supplier's and retailer's value chains link with the organisation.
• VALUE SHOP

  Differs from the value system in its primary activities.

  The support activities are the same as in the value system.

  The primary activities are classified as:

  • Problem finding and acquisition
  • Problem solving
  • Choosing among solutions
  • Execution and control/evaluation