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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