Corporate Strategy and Planning_Week3

8/16/2019 Corporate Strategy and Planning_Week3

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CorporateStrategy and

Planning


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esources ,

Competences

&

Strategic

Capability

R

C

S


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Resources

R

M

MM

Materials

Machines

Men

M Money


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• Nowadays key resources includes Machines,

Buildings, Financial resources, People; altogether both

quality and quantity.

• Should consider these resources when consider

strategic capability of the organization.

•

Analysis of strategic capabilities is a vital aspect.

• These capabilities forms the basics of competitive

advantage.

•

These analysis are compile as ‘Strategic’ and ‘Plans’.• Important concepts are ‘threshold capabilities’,

‘unique resources’, ‘core competences’


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Competences

• These are the strengths at core of an organization for

competitive advantage.

– Example: ‘Design’ in the fashion.

C


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Threshold Capability

• Those capabilities which an organization must have to

sustain in the market.

• Threshold resources;

– Based on the idea that in the most cases there is a minimumlevel of resources which an organization must groups simply.

– ICT companies must have a minimum level of resource

capabilities of R&D

– Its impossible to survive unless strong relationship with

customers

– Threshold resources inferences; low price strategy in a price-

sensitive market

C


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• Threshold Competences;

– These are the skills and expertise necessary to set up

resources effectively in the market.

– Design skills, manufacturing skills and marketing skills.

– Necessary level of competences is vital to sustain in themarket.

C


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Unique Resources and CoreCompetences

• Unique Resources:

– Resources which are dissimilar to an organization and which

no other organization owns.

– It could be an innovative product or process or other facility.

– Its vital to ensure that these resources are difficult to

duplicate, and can be communicated willingly.

C


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• Core Competences:

– Those central and unique skills or activities of the

organization which form the basis of its competitive

advantage.

– These are actually what the company does particularly well

compare to rivals.

– Dyson in the home appliance market are in design and

innovation.

C


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Strategic Capability

• Financial position of the company is the major factor

when considering Strategic Capability.

• Which financial aspect to measure?

– Shareholders; dividends

– Financers/ institutes; risk of debt

– Suppliers; payment for the goods

– Employees; liquidity over concerns of wages

S

Stakeholders


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The

Process of

Internal

Appraisal


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Resource Audit

• Is very useful when considering the importance of an

organization’s internal environment.

• A professional audit is belong to experienced

researchers / auditors

• Before; the desire, the resources and the briefing

• The aim of audit; discover the nature and quantity of

the resources available to the organization.• Complete audit is bases on; Physical resources, HR,

Financial resources and Intangible resources.


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Analysing Costs

• Cost efficiency in an organization can be achieved;

– Economies of Scale

– Supply costs

– Efficient production

– Experience curves


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Comparative Analysis

• Comparing the history of the company and its

performance

• Financial ratios;

– Sales / Capital

– Sales / employees


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Assessment of organisationalperformance

• For developing strategic plans; analysis of current and

past performance is vital

– Historical analysis of performance

– Compare relative performance of organizations in the sameindustry

– Benchmarking


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Financial analysis

• Balance sheet; shows the financial position

• PnL Account; details of profit and loss

• Operating cost statement; provides a detailed

breakdown of the costs incurred(percentage of profit/loss foreach department)


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Balancing the resources

• Can be analyze by considering;

– The mix of activities which collectively make up the

organizations overall portfolio

– The balance of skills and personalities of those employed inthe organization and ways in which they are linked together

– The flexibility of the organization’s resources and how well

they are able to adapt to a changing environment.


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Technics for

conducting

an internal

appraisal


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Value Chain Analysis


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Value et!or" Analysis

• The value chain of the organization links to;

– the value chain of its suppliers

– the value chain of its distributors

• Identifying the key sources of cost and value

• Identifying which activities are strategically

vital

• Identifying key profit areas

• Make or buy decisions

•

Selecting and working with other org.


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BCG Matrix

• Investments should channelled intoStars.

• Investments ofCash Cows should be at the level

necessary to maintain market share.

• Profitability ofDogs should be carefully monitored

and should withdraw unprofitable dogs.

• Should withdrawQuestion Marks which are not

potential for stars.


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Multifactor Portfolio Matrix

$nvest$nvest

$nvest

%anageSelectively

%anage

Selectively

%anageSelectively

&arvest

&arvest&arvest


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Multifactor Portfolio Matrix – criteria

%easuring mar"etattractiveness Competitive position'business strength(

Market size Market share

Size of key segments SBU growth rate

Growth rate Distribution

Seasonal demand Finanial resoures

Marketing o!!ortunities Market e"eti#eness

Com!etiti#e struture $rie

%ehnology &uality ' reliability


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Interpreting

internal

environment


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SWOT

Analysis

Documents

Corporate Strategy and Planning_Week3