(Scanning the Internal Environment)

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8 Νοε 2013 (πριν από 3 χρόνια και 11 μήνες)

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Measuring Strengths and Weaknesses

(Scanning the Internal Environment)



What are Strengths and Weaknesses?


Strengths
-

a company’s competitive advantages and other
distinctive competencies



distinctive competency
-

something an organization does
exceedingly well



Weaknesses
-

constraints that hinder movements in certain
directions



Types of Competencies


Superior manufacturing skills in producing a high quality product.


Superior system for delivering customer orders accurately and
swiftly.


Better after
-
sale service capability.


More skill in achieving low operating costs.


Superior product design capability.


Unusual innovativeness in new product development.


Better merchandising and product display skills.


Superior mastery of an important technology.


Better marketing and customer research.


Unusually effective salesforce.


Expertise in integrating multiple technologies to create whole
families of new products.

Company Resources can be

Strengths or Weaknesses


Companies control resources (assets, competencies,
processes, skills or knowledge). They can be strengths or
weaknesses. Must ask:


1. Does it provide a competitive edge? (value)

2. Do other competitors posses it? (rareness)

3. Is it costly for others to imitate? (imitability)

4. Is the firm organized to exploit the resource?
(organization)



Value Chain Analysis


Analyzing the firm’s value creating activities.



This is a good way to begin analyzing strengths and
weaknesses.

Corporate Value Chain

Support



Activities

Primary Activities

Profit



Margin

Firm Infrastructure



(general management, accounting, finance, strategic planning)

Human Resource Management



(recruiting, training, development)

Technology Development



(R&D, product and process improvement)

Procurement



(purchasing of raw materials, machines, supplies)

Inbound



Logistics



(raw



materials



handling and



warehousing)

Operations



(machining,



assembling,



testing)

Outbound



Logistics



(warehousing



and



distribution



of finished



product)

Marketing



and Sales



(advertising,



promotion,



pricing,



channel



relations)

Service



(installation,



repair, parts)

Source:

Adapted/repri
nted with the
permission of the The
Free Press, an imprint
of Simon & Schuster,
from
Competitive
Advantage: Creating and
Sustaining Superior
Performance

by Michael
E. Porter, p. 37.
Copyright © 1985 by
Michael E. Porter.


Using Value Chain Analysis


Examine your value chain for strengths and weaknesses.



Determine how to reduce non
-
value work.



Examine linkages between activities.


Scanning Internal Resources

Scan the internal environment and evaluate:

A. Organizational Structure

B. Organizational Culture

C. Organizational Resources


1. Marketing


2. Finance


3. Research & Development


4. Operations


5. Human Resources


6. Information Systems

Typical Strengths & Weaknesses of

Some Functional Areas of the Firm

Function


Strengths



Weaknesses

Marketing

Strong salesforce


Insufficient salesforce




Excellent distribution

Poor forecasting




Excellent mktg information


Finance/Acct

Excess cash


Using wrong cost system




Large credit line


Heavily leveraged




Excellent cost info


No timely reporting (e.g.,






inventory)


R&D/Design

Experienced designers

Insufficient R&D spending




Patent protection


Operations

Excellent quality


High production costs




Short cycle times


Unreliable delivery




Excellent delivery times





Measuring Strengths and

Weaknesses at Maytag


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



Hoover’s 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 factories

Good, 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


3.05


.15

.05

.10

.05

.15



.05

.05


.15

.20



.05


5

4

4

3

3



2

2


2

2



4


.75

.20

.40

.15

.45



.10

.10


.30

.40



.20