organizational analysis.ppt

7/22/2019 organizational analysis.ppt

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Prentice Hall, 2002

Chapter 4

Wheelen/Hunger1

Chapter 4Internal Scanning:

Organizational Analysis

PowerPoint Slides

Anthony F. Chelte

Western New England College


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Chapter 4

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Resource-Based Approach

Internal strategic factors:

Cri tical streng ths and weaknesses

that are l ikely to determ ine if the f irm

w il l be able to take advantage ofoppo rtuni t ies whi le avo id ing threats.


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Resource:

An asset, competency, pro cess, sk i l l,

or know ledge cont ro l led by the

corporat ion.


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Evaluating Key Resources

VRIO Framework

Value: Does i t provide com pet it ive

advantage?

Rareness: Do other competi tors possess i t?

Imitability: Is i t cost ly fo r others to im i tate?

Organization: Is the f irm organized to

exploi t the resource?


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5-Step approach to strategy analysis:

Identify & classify firms resources Strength s & weaknesses

Combine firms strengths into capabilities Core competencies

Dist inct iv e competenc ies


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5-Step approach to strategy analysis:

Profit potential of resources Sustainable competi t ive advantage

Select strategy Exploits firms resources relative to external

oppor tuni t ies

Identify resource gaps Invest in upgrading weaknesses


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Sustainability of an Advantage

Durability:

Rate at which a firms underlying

resources and capab i l it ies (co re

competencies) depreciate orbecome obso lete.


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Sustainability of an Advantage

Imitability:

Rate at which a firms underlying

resources and capab i l it ies (co re

competencies) can be dup l icatedby o thers.


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Core Competencies

Imitability of core competenciesdetermined by:

Transparency

Transferability

Replicability


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Core Competencies

Explicit Knowledge: Know ledge that can be easi ly art icu lated

and communicated.

Tacit Knowledge:

Know ledge that is no t easi ly

communicated because i t is deeplyroo ted in emp loyee experience or in a

corporations culture.


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Resource Sustainability


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Chapter 4

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Corporate Value Chain


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Corporate Value Chain Analysis

Examine each product lines value chain Core competencies & core deficiencies

Examine the linkages within each productlines value chain

Connections between the way one value activity isperformed and the cost of performance of anotheractivity

Examine the synergies among the value

chains of different product lines orbusiness units

Economies of scope


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Basic Organizational Structures:

Simple and Functional

I. Simple Structure

II. Functional Structure

Owner-Manager

Workers

Top Management

Manufacturing Sales Finance Personnel


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Basic Structures of

Corporations: DivisionalIII. Divisional Structure*

Manufacturing Finance Manufacturing Finance

Top Management

Product Division A Product Division B

*Conglomerate structure is a variant of the division structure.

Sales Personnel Sales Personnel


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Corporate Culture

Defined:

Collect ion o f beliefs, expectat ions, and

values learned and shared by a

corporations members and transmitted

f rom one generat ion of employees to

another.


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Corporate Culture

Distinct Attributes

1. Cultu ral intens ity Degree to which members of a unit accept

the norms, values, or other culture contentassociated with the unit.

2. Cultu ral integration Extent to which units throughout an

organization share a common culture.


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Corporate Culture

Important Functions

Sense of identity for employees Generate employee commitment

Stability of organization

Guide for appropriate behavior


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Strategic Marketing Issues

Market Position:

Who are our customers?

Market Segmentation: Niches, new product development

Marketing Mix:

Combination of key variables under the

corporations control used to affect demand and

gain competitive advantage.


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Marketing Mix Variables

Product Place Promotion Price

Quality Channels Advertising List price

Features Coverage Personal selling Discounts

Options Locations Sales promotion Allowances

Style Inventory Publicity Payment periods

Brand name Transport Credit terms

Packaging

Sizes

Services

Warranties

Returns

Source: Philip Kotler,Marketing Management: Analysis, Planning, and Control, 4th ed. (Englewood Cliffs, N.J.: Prentice-Hall,1980), p. 89. Copyright 1980. Reprinted by permission of Prentice-Hall, Inc.


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The Product Life Cycle

Introduction Growth* Maturity Decline

Time

*The right end of the Growthstage is often calledCompetitive Turbulencebecause of price and

distribution competition thatshakes out the weakercompetitors. For furtherinformation, see C. R. Wasson,Dynamic Competitive Strategyand Product Life Cycles, 3rd ed.(Austin, Tex.: Austin Press,1978).


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Strategic Financial Issues

Financial Leverage:

Ratio of total debt to total assets.

Capital Budgeting:

Analyzing and ranking possibleinvestments in fixed assets.


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Strategic R&D Issues

R&D Intensity: Spending on R&D as a percentage of sales

revenue.

Technological Competence:

Development and use of innovative technology.

Technology Transfer: Process of taking new technology from the lab to

the marketplace.


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Technological Discontinuity

What the S-Curves Reveal

Research Effort/Expenditure

In the corporate planning process, it is generally assumedthat incremental progress in technology will occur. But pastdevelopments in a given technology cannot be extrapolatedinto the future, because every technology has its limits. Thekey to competitiveness is to determine when to shift re-sources to a technology with more potential.

MatureTechnology

NewTechnology

Source: P. Pascarella, Are You Investingin the Wrong Technology? Industry Week(July 25, 1983), p. 38. Copyright 1983Penton/IPC. All rights reserved.Reprinted by permission.

ProductPerformance


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Strategic Operations Issues

Intermittent systems:Manufacturing systems where items

are normally processed sequentially

but the work and sequence of theprocess vary.

Continuous systems:

Laid out as lines where products arecontinuously assembled or

processed.


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Strategic HRM IssuesTeams

Autonomous (self-managing) Cross-functional

Concurrent engineering

Unionization

13.9% of labor force overall

12% of private labor force

Temporary Workers

Increase flexibility; avoid layoffs


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Strategic HRM Issues

Quality of Worklife Participative problem solving

Restructuring work

Innovative reward systems Improvements in work environment

Human Diversity Different races, cultures and

backgrounds in the workplace.


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Strategic Information Systems

Issues

Automate back-office processes

Automate individual tasks

Enhance key business functions

Develop competitive advantages


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Strategic Information Systems

Issues Intranet:

Information network within an

organization that also has access to theexternal worldwide Internet.

Extranet:

Information network within anorganization available to key suppliersand customers.


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Internal Factor Analysis Summary (IFAS)

Internal Factors Weight Rating

Weighted

Score Comments

1 2 3 4 5

1.00

Strengths

Weaknesses

Total Weighted Score

Internal Factor Analysis Summary (IFAS):


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Chapter 4

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Internal Factor Analysis Summary (IFAS):

Maytag as Example

Internal Factors

Weight Rating

Weighted

Score Comments

1 2 3 4 5

1.00

Strengths

Quality Maytag culture

Experienced top management

Vertical integration

Employee relations Hoovers international orientation

Weaknesses

Process-oriented R&D

Distribution channels

Financial position

Global positioning

Manufacturing facilities

Total Weighted Score

Quality key to success

Know appliances

Dedicated factoriesGood, but deteriorating

Hoover name in cleaners

Slow on new products

Superstores replacing

small dealers

High debt load

Hoover weak outside the

United Kingdom and

Australia

Investing now

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Impact of the Internet

Virtual Teams:

Groups of geographically and/ororganizationally dispersed coworkers that

are assembled using a combination of

telecommunications and information

technologies to accomplish anorganizational task.


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Impact of the Internet

Virtual Teams

Flatter organizational structures

Turbulent environments

Employee autonomy

Higher knowledge requirements

Globalization of trade

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organizational analysis.ppt