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Internal Scanning

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Internal Scanning:

Organizational Analysis

Internal Scanning 5-1


Resource-Based Approach to Organizational Analysis

Internal strategic factors --

–Critical strengths and weaknesses that are


likely to determine if the firm will be able to take
advantage of opportunities while avoiding
threats

•Resources
•Capabilities
•Competency-Cross Functional Integration
•Core competency Avon Products, Fedex,
•Distinctive competency - USP

Internal Scanning 5-2


Core and Distinctive Competencies

VRIO Framework --

–Value- Does it provide customer value and


competitive advantage?

–Rareness- Do no other competitors possess it?

–Imitability-Is it costly for others to imitate?

–Organization- Is the firm organized to exploit the


resource?

Internal Scanning 5-3


Resource-Based Approach to Organizational Analysis

5-Step Approach Strategy Analysis --


1. Identify and classify resources in terms of SW.

2. Combine strengths into capabilities

3. Appraise profit potential of capabilities in terms of


their potentials for sustainable competitive
advantage. An ability to harvest the profits from their
use.

4. Select strategy that best exploits

5. Identify resource gaps invest in upgrading


weaknesses

Internal Scanning 5-4


Continuum of Sustainability

Internal Scanning 5-5


Sustainability of Advantage

Imitability --

–Rate at which a firm’s underlying resources


and capabilities can be duplicated by others

Durability --

–Rate at which a firm’s underlying resources


and capabilities depreciate or become obsolete

Internal Scanning 5-6


Sustainability of Advantage

Determining Sustainability of an advantage

–Transparency is the speed with which other firms


can understand the relationship of resources and
capabilities supporting a successful firms' strategy.

–Transferability is the ability of competitors to gather


the resources and capabilities to support a competitive
advantage.

–Replicability ability of competitor to use duplicated


resources to imitate the other firms' success.

Internal Scanning 5-7


Business Models

Company’s method
for making money in
the current business
environment.

Internal Scanning 5-8


Business Models

Types of Models --

–Customer Solutions Model


–Profit Pyramid Model
–Multi-Component System/Installed Base Model
–Advertising Model
–Switchboard Model

Internal Scanning 5-9


Business Models

Types of Models --

–Time Model
–Efficiency Model
–Blockbuster Model
–Profit Multiplier Model
–Entrepreneurial Model
–De Facto Standard Model

Internal Scanning 5-10

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