chapter 4 worksheet - salem state university | salem state...

Chapter 4 WorksheetThe purpose of the internal analysis is to assess the competitive capabilities and resources of the company under analysis. For each strategic factor throughout the worksheet, conclusively state the specific nature of the strength or a weakness. This will strengthen your analysis and help you with your subsequent SWOT analysis.

1. How well is the current strategy working?In this section you must address the criteria and the 'how well' question simultaneously. For example, if the company uses a broad differentiation strategy as their present strategy, how well is the differentiation strategy working for the company? For a broad differentiation strategy, I would expect you to cite examples of adding value for the customer and other stakeholders. Then I expect you to determine how well they are implementing the strategy.

Criteria Facts Analysis ConclusionsWhat is strategy? How does management

intend to grow the business?

How will the company build loyal clientele and outcompete rivals?

How will each functional area operate?

How will the company improve performance?

What is the company’s business model?What are the present strategies? (Note: This question applies to the corporate, business and functional levels of the organization. Choose one of the five generic strategies discussed in Chapter 5.) What are the company’s proactive strategy initiatives?What are the company’s

Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th EditionChapter 4 Worksheet

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reactive strategy initiatives?Assess the company’s relative performance using the three tests for a winning strategy. - Goodness of fit (GOF)- Competitive advantage (You must answer question 2 below before analyzing the company’s competitive advantages.)- Performance(You must address the objectives question and financial analysis question below before you analyze the company’s performance.)

To address GOF, you must analyze the SWOT. If the majority of the intersections are in the S-O quadrant, the company has a good fit. For the CA test, you must first complete question 2 in Chapter 4. Your responses to the four tests of competitive value determine whether or not the company passes the CA test. For the performance test, you must examine the company’s actual performance. Look at their financial ratios and their relative performance. When you have the facts, it is much easier to conduct your


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analysis.

What is the company’s competitive scope stages of the industry's

production-distribution chain it operates,

geographic market coverage, and

size and composition of the customer base?

Please add other facets of competitive scope as necessary.

You are supposed to examine the company’s competitive scope from the perspective of how the competitive scope is a competitive capability within the overall framework of how well is the current strategy working. From your analysis, identify the particular strengths or weaknesses associated with the competitive scope strategy.What are the functional strategies (use chapter 10 for additional guidance) Production, Marketing. Finance, Human resources, R&D, Etc.?Start by listing the functional


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areas; then provide the facts associated with each of the areas. Finally, conduct your analysis and determine how well the functional areas are working and the associated strengths and weaknesses.

You are supposed to examine the company’s functional strategies from the perspective of how the strategies provide a competitive capability within the overall framework of how well the current strategy is working. You are supposed to determine the strengths or weaknesses associated with the strategies. Determining the strategy is working is the first step. Your analysis of why is the strategy working or not working will identify the strengths or weaknesses.Has the company achieved its financial objectives? Determine if they achieved their short and long-term objectives and provide the supporting analysis why they did or did not achieve the objective. Then you are in a position to determine the associated strengths or weaknesses.Has the company achieved its


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strategic objectives? Determine if they achieved their short and long-term objectives and provide the supporting analysis why they did or did not achieve the objective. Then you are in a position to determine the associated strengths or weaknesses.What is the company's position relative to EACH of its competitors?

Technology Product innovation Customer service Product quality Delivery time Price New product time to

market Please add other facets

of relative position as necessary.

Is the company demonstrating improvement in internal performance measures (e.g. days of inventory, productivity, unit cost, defect rate, delivery times, warranty costs)?What is the firm’s image and reputation with customers?If the strategy is not working, is it due to:

Weak strategy and/or


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Poor implementation

Evaluating the five phases of the strategy processHow effective is the company in each phase of the strategy making process?

Criteria Facts Analysis ConclusionDeveloping a mission and visionSetting objectivesCrafting a strategy to achieve the objectives and visionImplementing and executing the strategyMonitoring developments, evaluating performance, and making corrective adjustmentsRevising phases 1-4 in light of actual performance, changing conditions, new opportunities and new ideas

2. What are the company's resource strengths and weaknesses? The purpose of this tool is to assess the competitive values of the company's resources. The four tests of competitive value are: Is the resource hard to copy? How long does the resource last? Is the resource really competitively superior? Can the resource be trumped by a rival's resources/capabilities?If you can answer the first three questions in the affirmative and the last question with a no, then decide if the resource is the basis for a competitive advantage. As a minimum, for each of the resource types listed below, assess the competitive value of each resource.

To address the resource strengths and weaknesses question, you must answer all four questions for each of the criteria. For example, answer all four questions for proprietary technology. Then answer all four questions for advertising and promotion. Continue with the same approach for each of the criteria. You must also provide solid logic and analysis in your responses. Why are you answering yes or no to each of the four questions? After completing your analysis, you can determine if the company under analysis has CAs or strengths.


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Please identify all of competitive advantages. All of the CAs are strengths. A company may have a resource strength that is not a CA. Identify all of the company’s strengths and weaknesses.CriteriaPlease note the following criteria are examples to get you started. You should add the applicable resources for each category.

Facts Analysis Conclusions

Skills and expertise Proprietary technology advertising and promotion product innovation ability to improve

production processes technological know-howPhysical assets plant capacity plant and equipment age

and technological capabilities

plant and retail location access to distribution

channels global distribution

capability ownership of valuable

natural resourcesHuman assets Superior intellectual

capital Experienced and capable

workforce Talented employees in key

areas Cutting-edge knowledge

in technology or other


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important areas of the business

Collective learning embedded in the organization

Proven managerial know-how

Organizational asset Proven quality control

systems Proprietary technology Key patents State-of-the-art systems

for doing business Ownership or important

natural resources A cadre of highly trained

customer service representatives

A strong distribution and/or retail network

financial position

Intangible asset image brand name reputation for customer

service buyer loyalty technological leadershipCompetitive capabilities cost advantages market share leadership superior products/services wider/deeper product line

than rivals


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wide geographic coverage sophisticated use of e-

commerce award-winning customer

serviceAlliances or cooperative ventures

3A. Are the company's prices and costs competitive? This question applies to all companies independent of the strategy (cost or differentiation) they use to compete in their industry. Using the following criteria, assess each step in the value chain (inbound logistics and supplies, operations, outbound logistics, sales and marketing, service, R&D, human resources, general and administrative) and compare each step with the competitor's prices and costs. After completing this analysis, examine the value chain as a whole. How does the integration of each successive step in the value chain lower costs? Finally, assess the value chain of the company in the context of the industry.

Address each cost driver for each step in the value chain. Concentrate on how the company uses the cost drivers to reduce costs. Make sure you list the associated strengths and weaknesses in their cost savings activities through executional drivers.

Inbound Logistics

Operations Outbound Logistics

Sales and Marketing

Service Profit Margin

R&D HRM A & G

Structural cost drivers Scale economies Learning curve Technology

requirements Capital intensity Product line

complexity Etc.


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Executional cost drivers Commitment to

continuous improvement

Product quality Process quality Capacity

utilization Internal business

processes Working with

buyers and suppliers on costs

Etc.


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3B. If the company uses either a differentiation or best-value strategy, also assess how each step in the value chain creates or adds value (e.g. incorporates product attributes and user features, raises performance, increases buyer satisfaction) and how the integration of each successive step in the value chain increases value. Provide the supporting analysis to determine how the company adds value and develops specific strengths and weaknesses. Pleas list the strengths and weaknesses.

Criteria Inbound Logistics

Operations Outbound Logistics

Sales and Marketing

Service Profit Margin

R&D HRM A & G

Incorporate product attributes and user features that lower the buyer's overall costs of using the company's product

Incorporate features that raise the performance a buyer gets out of the product,

Increase features that enhance buyer satisfaction in non-economic or intangible ways

Deliver value to customers via competitive capabilities that rivals do not have or cannot afford to match

4. How strong is the company's competitive position?Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th EditionChapter 4 Worksheet

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Although I provide only one column for competitors, you should add the number of columns necessary to assess each of the competitors.Key success factors (Refer to Q 6 in the external analysis (ch3 worksheet)

weight Company Competitorsrating Weighted

scorerating Weighted

score

5. What strategic issues does the company face?The following are typical issue areas. This is not an exclusive list of areas. You should provide additional strategic issues based on your analysis of the environment and the company's competitive capabilities and resources.

Facts Analysis Conclusions

Is the present strategy adequate in light of driving forces present in the industry?To address this question, look at the SWOT analysis. If most of the intersections are in the S-O quadrant, you can conclude that the company’s strategy is adequate. If the intersections are in the other quadrants, your conclusions should be different.


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Is the company’s present strategy geared to the industry's future key success factors?Please start with the industry KSFs you identified in the question 6 of the Chapter 3 worksheet. Use the KSFs as the starting point for your analysis. Then determine how well the company performs each of the KSFs. If the company has high performance on each KSF, their current strategy is geared to the industry’s future key success factors. Does the present strategy protect the company against external threats and internal weaknesses?

This criterion is asking you to analyze the intersection of the external threats and the company’s strengths and weaknesses in the SWOT matrix. You have to list the threats and, strengths and weaknesses as the starting point for conducting the analysis.

If the majority of the intersections are in the strengths-threats portion of the matrix, then the company’s current strategy protects them. If the majority of the intersections are in the weaknesses-threats portion of the matrix, then the strategy will not protect them.Is the company vulnerable to competitive attack by one or more rivals?


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Does the company have competitive advantages (Refer to your responses to question 2 above.) or must it offset the competition's competitive advantages?What are the strong and weak parts of the current strategy?What additional moves are necessary to:

Improve costs Capitalize on emerging

opportunities Boost the company's competitive

position

6. Financial ratio analysis for the company and industrySpecifically state the strengths and weaknesses that you find through your analysis of the financial ratios.

7. Top Management’s values and perspectives How are the personal ambitions, business philosophies, and ethical beliefs of managers stamped on the company's strategy and competitive capabilities? Specifically state the strengths and weaknesses that you find through your analysis of Top Management’s values and perspectives.

8. Organization’s culture How do the company's values, policies and culture impact the strategy, strategy implementation and company's competitive capabilities?Specifically state the strengths and weaknesses that you find through your analysis of the organization’s culture.

9. SWOT Matrix The external and internal analyses provide you with information you need to tailor the strategy for a particular company. The external analysis provided you with the opportunities and threats for the industry and the company. The internal analysis revealed the company's competitive capabilities (strengths and weaknesses).

To tailor the strategy, you want a fit between the company's capabilities and the environment's constraints and opportunities. To conduct the SWOT, look for the points of intersection between opportunities and strengths and weaknesses. S-O intersections enable a company to exploit the opportunity. W-O intersections require the company to address the weakness in order that they may fully exploit the opportunity. S-T intersections allow the company to defend against the threat. Strengths spent on defending against threats detract from the company's ability to use that particular resource for exploiting opportunities. W-T intersections jeopardize the company. These intersections require the company to


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bolster the weakness in order to provide defensive capabilities. Depending on the immediacy of the threat, these intersections may require the company's immediate attention.

Opportunities Threats

Opp

ortu

nity

#1

Opp

ortu

nity

#3

Opp

ortu

nity

#3

Opp

ortu

nity

#4

Opp

ortu

nity

#5

Thre

at #

1

Thre

at #

2

Thre

at #

3

Thre

at #

4

Thre

at #

5

Stre

ngth

s

Strength # 1

Strength # 2

Strength # 3

Strength # 4

Strength # 5

Wea

knes

ses

Weaknesses # 1

Weaknesses # 2

Weaknesses # 3

Weaknesses # 4

Weaknesses # 5


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chapter 4 worksheet - salem state university | salem state...

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