Download - Chapter 4 - Internal Assessment
-
7/25/2019 Chapter 4 - Internal Assessment
1/90
Chapter IV
THE INTERNAL
ASSESSMENT
-
7/25/2019 Chapter 4 - Internal Assessment
2/90
THE NATURE OF ANINTERNAL AUDIT
-
7/25/2019 Chapter 4 - Internal Assessment
3/90
A COMPREHENSIVE STRATEGIC -MANAGEMENT MODEL
-
7/25/2019 Chapter 4 - Internal Assessment
4/90
Distinctive Competencies
A frms strenths that !ann"t #e eas$%&mat!he' "r $m$tate' #& !"mpet$t"rs(
)*$%'$n !"mpet$t$+e a'+antaes$n+"%+es ta,$n a'+antae " '$st$n!t$+e!"mpeten!$es(
.E/ INTERNAL FORCES
-
7/25/2019 Chapter 4 - Internal Assessment
5/90
The Internal AuditRe0*$res ather$n an' ass$m$%at$n$n"rmat$"n a#"*t the frms manaement1
mar,et$n1 fnan!e2a!!"*nt$n1pr"'*!t$"n2"perat$"ns1 resear!h an''e+e%"pment 3R4D51 an' manaement$n"rmat$"n s&stems "perat$"ns(
Pr"+$'es m"re "pp"rt*n$t& "r part$!$pants t"*n'erstan' h"6 the$r 7"#s1 'epartments1 an''$+$s$"ns ft $nt" the 6h"%e "ran$8at$"n(
THE PROCESS OF PERFORMING ANINTERNAL AUDIT
-
7/25/2019 Chapter 4 - Internal Assessment
6/90
9The 'e+e%"pment " !"n!%*s$"ns "n the :; t"
-
7/25/2019 Chapter 4 - Internal Assessment
7/90
9D*r$n the frst ft& &ears1 s*!!ess*%frms "!*se' the$r ener$es "n"pt$m$8$n the per"rman!e " "ne " the
pr$n!$pa% *n!t$"nsBpr"'*!t$"n2"perat$"ns1 R4D1 "rmar,et$n(
Th$s trans$t$"n r"m a s$n%e *n!t$"n"!*s t" a m*%t$*n!t$"na% "!*s $sessent$a% "r s*!!ess*% strate$!
manaement?
ANSOFF
T"'a&1 '*e t" r"6$n !"mp%e=$t&an' '&nam$sm " the en+$r"nment1s*!!ess $n!reas$n%& 'epen's "n a
7*'$!$"*s !"m#$nat$"n " se+era%*n!t$"na% $n*en!es(
-
7/25/2019 Chapter 4 - Internal Assessment
8/90
9@e ma& !"n!ept*a%%& separate p%ann$n"r the p*rp"se " the"ret$!a% '$s!*ss$"nan' ana%&s$s1 #*t $n pra!t$!e1 ne$ther $s $t
a '$st$n!t ent$t& n"r $s $t !apa#%e " #e$nseparate'(an'
GEORGE
The p%ann$n *n!t$"n $s m$=e' 6$tha%% "ther #*s$ness *n!t$"ns %$,e $n, "n!e m$=e'6$th 6ater1 $t !ann"t #e set apart( It $ssprea' thr"*h"*t an' $s a part " the6h"%e mana$n an "ran$8at$"n?
-
7/25/2019 Chapter 4 - Internal Assessment
9/90
THE RESOURCE-)ASED VIE@
-
7/25/2019 Chapter 4 - Internal Assessment
10/90
The Resource Based View(RBV) Approach
C"nten's that $nterna% res"*r!es arem"re $mp"rtant "r a frm than e=terna%a!t"rs $n a!h$e+$n an' s*sta$n$n!"mpet$t$+e a'+antae
THE RESOURCE-)ASED VIE@ 3R)V5
-
7/25/2019 Chapter 4 - Internal Assessment
11/90
9In a 6"r%' 6here !*st"mer preeren!es are+"%at$%e1 the $'ent$t& " !*st"mers $s !han$nan' the te!hn"%"$es "r ser+$n !*st"merre0*$rements are !"nt$n*a%%& e+"%+$n1 ane=terna%%& "!*se' "r$entat$"n '"es n"t pr"+$'e ase!*re "*n'at$"n "r "rm*%at$n %"n termstrate&( @hen the e=terna% en+$r"nment $s $nthe state " *=1 the frms "6n res"*r!es an'
!apa#$%$t$es ma& #e a m*!h m"re sta#%e #as$s "n6h$!h t" 'efne $ts $'ent$t&( Hen!e1 a 'efn$t$"n
" a #*s$ness $n terms " 6hat $t $s !apa#%e "'"$n ma& "er a m"re '*ra#%e #as$s "rstrate& than a 'efn$t$"n #ase' *p"n the nee'
6h$!h the #*s$ness see,s t" sat$s&?
RO)ERT GRANT
+"%at$%e
!han$n
e+"%+$n
Hen!e1 a 'efn$t$"n " a#*s$ness $n terms " 6hat $t $s !apa#%e " '"$nma& "er a m"re '*ra#%e #as$s "r strate& thana 'efn$t$"n #ase' *p"n the nee' 6h$!h the#*s$ness see,s t" sat$s&?
-
7/25/2019 Chapter 4 - Internal Assessment
12/90
Pr"p"nents " theRBV !"nten' that"ran$8at$"na% per"rman!e 6$%%pr$mar$%& #e 'eterm$ne' #& $nterna%
res"*r!es that !an #e r"*pe' $nt"these three a%%-en!"mpass$n!ate"r$esBPhysical Resources
Human Resources
r!ani"ational Resources
THE RESOURCE-)ASED VIE@ 3R)V5
-
7/25/2019 Chapter 4 - Internal Assessment
13/90
PhysicalResources
HumanResources
r!ani"ationalResources
P%ant an'
E0*$pment L"!at$"n Te!hn"%"& Ra6 Mater$a%s Ma!h$nes
Emp%"&ees
E=per$en!e .n"6%e'e Tra$n$n Inte%%$en!e S,$%%s A#$%$t$es
F$rm str*!t*re
P%ann$n an'Pr"!ess In"rmat$"n
S&stems Patent Tra'emar,s C"p&r$ht Data#ase
-
7/25/2019 Chapter 4 - Internal Assessment
14/90
F"r a res"*r!e t" #e +a%*a#%e1 $t m*st#e e$therB:( Rare
-
7/25/2019 Chapter 4 - Internal Assessment
15/90
INTEGRATING
STRATEG/ ANDCULTURE
-
7/25/2019 Chapter 4 - Internal Assessment
16/90
r!ani"ational culture s$n$f!ant%&ae!ts #*s$ness 'e!$s$"ns an' th*sm*st #e e+a%*ate' '*r$n an $nterna%
strate$!-manaement a*'$t(I strate$es !an !ap$ta%$8e "n !*%t*ra%
strenths1 s*!h as a stron! wor# ethic"r hi!hly ethical $elie%s1 thenmanaement "ten !an s6$t%& an'eas$%& implement!hanes(
INTEGRATING STRATEG/ ANDCULTURE
-
7/25/2019 Chapter 4 - Internal Assessment
17/90
EAMPLES OF CULTURAL PRODUCTS
-
7/25/2019 Chapter 4 - Internal Assessment
18/90
L"rs!h "*n' that e=e!*t$+es $n s*!!ess*%!"mpan$es are em"t$"na%%& !"mm$tte' t"the frms !*%t*re1 #*t he !"n!%*'e' that
!*%t*re !an $nh$#$t strate$! manaement$n t6" #as$! 6a&sB F$rst1 manaers re0*ent%& m$ss the s$n$f!an!e
" !han$n e=terna% !"n'$t$"ns #e!a*se the& are#%$n'e' #& str"n%& he%' #e%$es(
Se!"n'1 6hen a part$!*%ar !*%t*re has #eenee!t$+e $n the past1 the nat*ra% resp"nse $s t"st$!, 6$th $t $n the *t*re1 e+en '*r$n t$mes "ma7"r strate$! !hane(
INTEGRATING STRATEG/ ANDCULTURE
-
7/25/2019 Chapter 4 - Internal Assessment
19/90
POSSI)LE ASPECTS OF ANORGANIATIONS CULTURE
-
7/25/2019 Chapter 4 - Internal Assessment
20/90
MANAGEMENT
-
7/25/2019 Chapter 4 - Internal Assessment
21/90
THE FUNCTIONS OF MANAGEMENT
-
7/25/2019 Chapter 4 - Internal Assessment
22/90
The *n!t$"ns " manaement !"ns$st " f+e#as$! a!t$+$t$esB
P%ann$n
Oran$8$n
M"t$+at$n Sta>n
C"ntr"%%$n
These a!t$+$t$es are $mp"rtant t" assess $nstrate$! p%ann$n #e!a*se an "ran$8at$"n
sh"*%' !"nt$n*a%%& capitali"e"n $tsmanaement strenths an' improve"n $tsmanaement 6ea,nesses(
THE FUNCTIONS OF MANAGEMENT
-
7/25/2019 Chapter 4 - Internal Assessment
23/90
Plannin! the pr"!ess #& 6h$!h "ne 'eterm$nes 6hether t" attempt a
tas,1 6"r,s "*t the m"st ee!t$+e 6a& " rea!h$n 'es$re'"#7e!t$+es an' prepares t" "+er!"me *ne=pe!te' '$>!*%t$es6$th a'e0*ate res"*r!es(
The $ene&ts o% plannin!' He%ps $n a!h$e+$n ma=$m*m ee!t r"m a $+en e"rt
Ena#%es t" ta,e $nt" a!!"*nt re%e+ant a!t"rs an' "!*s "nthe !r$t$!a% "nes
Gather nee'e' res"*r!es t" !arr& "*t tas,s ee!t$+e%& an'e>!$ent%&
I'ent$& an' ta,e a'+antae " e=terna% "pp"rt*n$t$es an'm$n$m$8e the $mpa!t " e=terna% threats
De+e%"p s&ner&
A%%"6 t" a'apt t" !han$n mar,ets
PLANNING
-
7/25/2019 Chapter 4 - Internal Assessment
24/90
r!ani"in! Assem#%$n an' !""r'$nat$n the h*man1 fnan!$a%1
ph&s$!a%1 $n"rmat$"na%1 an' "ther res"*r!es nee'e' t"a!h$e+e "a%s(
Determ$n$n 6h" '"es 6hat an' 6h" rep"rts t" 6h"m(
Three seuential activities* +or# ,peciali"ation )rea,$n '"6n tas,s $nt" 7"#s an' the 'e+e%"pment " 7"#
'es!r$pt$"ns an' 7"# spe!$f!at$"ns(
-* Departmentali"ation C"m#$n$n 7"#s t" "rm 'epartments t" ma,e an
"ran$8at$"na% str*!t*re1 span " !"ntr"% an' !ha$n "!"mman'(
.* Dele!atin! Authority
G$+$n a*th"r$t& an' resp"ns$#$%$t& t" emp%"&ees(
ORGANIING
-
7/25/2019 Chapter 4 - Internal Assessment
25/90
/otivatin!The pr"!ess " $n*en!$n pe"p%e t"a!!"mp%$sh spe!$f! "#7e!t$+es
0our /a1or Components2eadership De+e%"p$n a +$s$"n " the frms *t*re an' $nsp$r$n
pe"p%e t" 6"r, har' t" a!h$e+e that +$s$"n(
3roup Dynamics In"rma% r"*ps that ae!t the emp%"&ees m"ra%ean' sat$sa!t$"n
Communication
r!ani"ational Chan!e
MOTIVATING
-
7/25/2019 Chapter 4 - Internal Assessment
26/90
,ta4n!C"ntr"%s a%% re!r*$tment an' pers"nne% nee's" the frm
A%s" !a%%e' pers"nne% manaement " h*manres"*r!e manaement(
In!%*'es a!t$+$t$es 6$th emp%"&ees %$,eB Re!r*$t$n
Inter+$e6$nTest$n
Se%e!t$n
Or$ent$n
STAFFING
Pr"m"t$n
Transerr$n Dem"t$n
D$sm$ss$n
Mana$n*n$"n
re%at$"ns
Tra$n$n
De+e%"p$n Car$n "r
E+a%*at$n
Re6ar'$n
D$s!$p%$n$n
-
7/25/2019 Chapter 4 - Internal Assessment
27/90
Controllin! In!%*'es a!t$+$t$es *n'erta,en t" ens*re thata!t*a% "perat$"ns !"n"rm t" p%anne'
"perat$"ns(0our Basic ,tepsEsta#%$sh$n per"rman!e stan'ar's
Meas*r$n $n'$+$'*a% an' "ran$8at$"na%
per"rman!eC"mpar$n a!t*a% per"rman!e t" p%anne'per"rman!e stan'ar's
Ta,$n !"rre!t$+e a!t$"ns
CONTROLLING
-
7/25/2019 Chapter 4 - Internal Assessment
28/90
:( D"es the frm *se strate$!-manaement!"n!epts
-
7/25/2019 Chapter 4 - Internal Assessment
29/90
MAR.ETING
-
7/25/2019 Chapter 4 - Internal Assessment
30/90
/ar#etin! the pr"!ess " 'efn$n1 ant$!$pat$n1 !reat$n1 an'
*%f%%$n !*st"mers nee's an' 6ants "r pr"'*!ts an'ser+$!es(
0unctions o% /ar#etin! C*st"mer Ana%&s$s
Se%%$n Pr"'*!ts2Ser+$!es
Pr"'*!t an' Ser+$!e P%ann$n
Pr$!$n
D$str$#*t$"n
Mar,et$n Resear!h
C"st2)eneft Ana%&s$s
MAR.ETING AND ITS FUNCTIONS
-
7/25/2019 Chapter 4 - Internal Assessment
31/90
C*st"mer ana%&s$s the e=am$nat$"n an' e+a%*at$"n " !"ns*mernee's1 'es$res1 an' 6ants
essent$a% $n 'e+e%"p$n an ee!t$+e m$ss$"nstatement
$n+"%+es the "%%"6$n a!t$+$t$es
a'm$n$ster$n !*st"mer s*r+e&s
ana%&8$n !"ns*mer $n"rmat$"n e+a%*at$n mar,et p"s$t$"n$n strate$es
'e+e%"p$n !*st"mer pr"f%es
'eterm$n$n "pt$ma% mar,et sementat$"n
strate$es
CUSTOMER ANAL/SIS
-
7/25/2019 Chapter 4 - Internal Assessment
32/90
,ellin!enera%%& 'eterm$nes the s*!!ess " strate&$mp%ementat$"n(
In+"%+es man& mar,et$n a!t$+$t$ess*!h asBA'+ert$s$n
Sa%es Pr"m"t$"n
P*#%$!$t&
Pers"na% Se%%$n
Sa%es F"r!e Manaement
C*st"mer Re%at$"ns
Dea%er Re%at$"ns
SELLING PRODUCTS2SERVICES
-
7/25/2019 Chapter 4 - Internal Assessment
33/90
SELLING PRODUCTS2SERVICES
-
7/25/2019 Chapter 4 - Internal Assessment
34/90
Product and service plannin!V$ta% 6hen a !"mpan& $s p*rs*$n pr"'*!t'e+e%"pment "r '$+ers$f!at$"n
$n!%*'es a!t$+$t$es s*!h asBTest mar,et$n Pr"'*!t an' #ran' p"s$t$"n$n
De+$s$n 6arrant$es
Pa!,a$n
Determ$n$n pr"'*!t "pt$"ns Feat*res
St&%e an' 0*a%$t&
De%et$n "%' pr"'*!ts
Pr"+$'$n "r !*st"mer ser+$!e
PRODUCT AND SERVICE PLANNING
-
7/25/2019 Chapter 4 - Internal Assessment
35/90
Pricin!S"met$mes an "ran$8at$"n 6$%% p*rs*e a "r6ar'
$nterat$"n strate& pr$mar$%& t" a$n #etter!"ntr"% "+er pr$!es !hare' t" !"ns*mers
,ta#eholders that a5ect pricin!decisionsB C"ns*mer
G"+ernments
S*pp%$ers D$str$#*t"rs
C"mpet$t"rs
PRICING
-
7/25/2019 Chapter 4 - Internal Assessment
36/90
Distri$ution espe!$a%%& $mp"rtant 6hen a frm $s str$+$n t"
$mp%ement a mar,et 'e+e%"pment "r "r6ar'Interat$"n strate&
Includes the %ollowin! activities' @areh"*s$n
D$str$#*t$"n !hanne%s
D$str$#*t$"n !"+erae
Reta$% s$te %"!at$"ns Sa%es terr$t"r$es
In+ent"r& %e+e%s an' %"!at$"n
Transp"rtat$"n !arr$ers
@h"%esa%$n
Reta$%$n
DISTRI)UTION
-
7/25/2019 Chapter 4 - Internal Assessment
37/90
/ar#etin! researchthe s&stemat$! ather$n1 re!"r'$n1an' ana%&8$n " 'ata a#"*t pr"#%ems
re%at$n t" the mar,et$n " ""'s an'ser+$!es
!an *n!"+er !r$t$!a% strenths an'
6ea,nesses
MAR.ETING RESEARCH
-
7/25/2019 Chapter 4 - Internal Assessment
38/90
Three steps are re0*$re' t" per"rm a!"st2#eneft ana%&s$sB
:( !"mp*te the t"ta% !"sts ass"!$ate'
6$th a 'e!$s$"n1
-
7/25/2019 Chapter 4 - Internal Assessment
39/90
Are mar,ets semente' ee!t$+e%&
Is the "ran$8at$"n p"s$t$"ne' 6e%% am"n!"mpet$t"rs
Has the f rms mar,et share #een $n!reas$nAre present !hanne%s " '$str$#*t$"n re%$a#%e
an' !"st ee!t$+e
D"es the frm ha+e an ee!t$+e sa%es
"ran$8at$"nD"es the frm !"n'*!t mar,et resear!h
Are pr"'*!t 0*a%$t& an' !*st"mer ser+$!e""'
Are the frms pr"'*!ts an' ser+$!es pr$!e'
MAR.ETING AUDIT CHEC.LIST OFUESTIONS
-
7/25/2019 Chapter 4 - Internal Assessment
40/90
D"es the frm ha+e an ee!t$+e pr"m"t$"n1a'+ert$s$n1 an' p*#%$!$t& strate&
Are mar,et$n1 p%ann$n1 an' #*'et$n
ee!t$+eD" the frms mar,et$n manaers ha+e
a'e0*ate e=per$en!e an' tra$n$n
Is the f rms Internet presen!e e=!e%%ent as!"mpare' t" r$+a%s
MAR.ETING AUDIT CHEC.LIST OFUESTIONS
-
7/25/2019 Chapter 4 - Internal Assessment
41/90
FINANCE2ACCOUNTING
FUNCTIONS
-
7/25/2019 Chapter 4 - Internal Assessment
42/90
Three decisions !"mpr$s$nfnan!e2a!!"*nt$n *n!t$"nsBThe $n+estment 'e!$s$"nThe fnan!$n 'e!$s$"n
The '$+$'en' 'e!$s$"n
FINANCE2ACCOUNTING FUNCTIONS
-
7/25/2019 Chapter 4 - Internal Assessment
43/90
Investment decisionthe a%%"!at$"n an' rea%%"!at$"n "!ap$ta% an' res"*r!es t" pr"7e!ts1
pr"'*!ts1 assets1 an' '$+$s$"ns " an"ran$8at$"n
a%s" ,n"6n as !ap$ta% #*'et$n
re0*$re' t" s*!!ess*%%& $mp%ementstrate$es
INVESTMENT DECISION
-
7/25/2019 Chapter 4 - Internal Assessment
44/90
0inancin! decision 'eterm$nes the #est !ap$ta% str*!t*re "r the frm an'
$n!%*'es e=am$n$n +ar$"*s meth"'s #& 6h$!h the frm!an ra$se !ap$ta%
M*st !"ns$'er #"th sh"rt-term an' %"n-term nee's"r 6"r,$n !ap$ta%(
6ey &nancial ratios that indicatewhether a &rm7s &nancin! decision are
e5ective' De#t-t"-e0*$t& rat$"
De#t-t"-t"ta%-assets rat$"
FINANCING DECISION
-
7/25/2019 Chapter 4 - Internal Assessment
45/90
Dividend decisions !"n!ern $ss*es s*!h as the per!entae " earn$ns
pa$' t" st"!,h"%'ers1 the sta#$%$t& " '$+$'en's pa$'"+er t$me1 an' the rep*r!hase "r $ss*an!e " st"!,
'eterm$ne the am"*nt " *n's that are reta$ne' $n afrm !"mpare' t" the am"*nt pa$' "*t t" st"!,h"%'ers
0inancial ratios that help evaluatedividend decisions'
Earn$ns-per-share rat$" D$+$'en's-per-share rat$"
Pr$!e-earn$ns rat$"
DIVIDEND DECISIONS
-
7/25/2019 Chapter 4 - Internal Assessment
46/90
Reas"ns "r pa&$n '$+$'en's e+en6hen *n's !"*%' #e #etterre$n+este'B
:(Pa&$n !ash $s !*st"mar&
-
7/25/2019 Chapter 4 - Internal Assessment
47/90
0inancial Ratio AnalysisThe m"st 6$'e%& *se' meth"' "r 'eterm$n$nan "ran$8at$"ns strenths an' 6ea,nesses$n the $n+estment1 fnan!$n1 an' '$+$'en'areas
Can s$na% strenths "r 6ea,nesses $nmanaement1 mar,et$n1 pr"'*!t$"n1 resear!han' 'e+e%"pment1 an' manaement
$n"rmat$"n s&stems a!t$+$t$es(
Trend AnalysisA *se*% te!hn$0*e that $n!"rp"rates #"tht$me an' $n'*str& a+erae '$mens$"ns "
fnan!$a% rat$"s(
FINANCIAL RATIO ANAL/SIS
-
7/25/2019 Chapter 4 - Internal Assessment
48/90
FINANCIAL RATIO TREND ANAL/SIS
-
7/25/2019 Chapter 4 - Internal Assessment
49/90
2iuidity Ratios Meas*re a f rms a#$%$t& t" meet mat*r$n sh"rt-term
"#%$at$"ns
2evera!e Ratios Meas*re the e=tent t" 6h$!h a frm has #een fnan!e' #&
'e#t
Activity Ratios Meas*re h"6 ee!t$+e%& a frm $s *s$n $ts res"*r!es
Pro&ta$ility Ratios Meas*re manaements "+era%% ee!t$+eness as sh"6n #&
the ret*rns enerate' "n sa%es an' $n+estment
3rowth Ratios Meas*re the frms a#$%$t& t" ma$nta$n $ts e!"n"m$! p"s$t$"n
$n the r"6th " the e!"n"m& an' $n'*str&
)ASIC T/PES OF FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
50/90
A SUMMAR/ OF .E/FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
51/90
A SUMMAR/ OF .E/FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
52/90
A SUMMAR/ OF .E/FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
53/90
A SUMMAR/ OF .E/FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
54/90
Manaement1 mar,et$n manaement1pr"'*!t$"n2"perat$"ns1 resear!h an''e+e%"pment1 an' manaement $n"rmat$"ns&stems 'e!$s$"ns(
A!t$"ns #& !"mpet$t"rs1 s*pp%$es1 '$str$#*t"rs1!re'$t"rs1 !*st"mers an' shareh"%'ers(
E!"n"m$!1 s"!$a%1 !*%t*ra%1 'em"raph$!1en+$r"nmenta%1 p"%$t$!a%1 "+ernmenta%1 %ea%1
an' te!hn"%"$!a% tren's(
OTHER FACTORS THAT AFFECT AFIRMS FINANCIAL CONDITION
-
7/25/2019 Chapter 4 - Internal Assessment
55/90
)EFORE AND AFTER )REA.EVENCHART @HEN PRICES ARE LO@ERED
-
7/25/2019 Chapter 4 - Internal Assessment
56/90
)EFORE AND AFTER )REA.EVEN CHART@HEN FIED COSTS ARE INCREASED
)EFORE AND AFTER )REA.EVEN CHART
-
7/25/2019 Chapter 4 - Internal Assessment
57/90
)EFORE AND AFTER )REA.EVEN CHART@HEN PRICES ARE LO@ERED AND FIED
COSTS ARE INCREASED
-
7/25/2019 Chapter 4 - Internal Assessment
58/90
H"6 has ea!h rat$" !hane' "+ert$me
H"6 '"es ea!h rat$" !"mpare t"$n'*str& n"rms
H"6 '"es ea!h rat$" !"mpare 6$th,e& !"mpet$t"rs
FINANCIAL RATIO ANAL/SIS
-
7/25/2019 Chapter 4 - Internal Assessment
59/90
Based on Accountin! DataF$rms '$er $n treatment " s"me $tems 3e(('epre!$at$"n1 $n+ent"r& +a%*at$"n5(
,easonal 0actorsCan $n*en!e !"mparat$+e rat$"s(
Con%ormity or departure withindustry avera!esD"es n"t esta#%$sh 6$th !erta$nt& that a frm$s per"rm$n n"rma%%&1 "r that $t $s 6e%%manae'(
LIMITATIONS OF FINANCIAL RATIOS
-
7/25/2019 Chapter 4 - Internal Assessment
60/90
:( @here $s the frm fnan!$a%%& str"n an'6ea, as $n'$!ate' #& fnan!$a% rat$"ana%&ses
-
7/25/2019 Chapter 4 - Internal Assessment
61/90
J( Are '$+$'en' pa&"*t p"%$!$esreas"na#%e
K( D"es the frm ha+e ""' re%at$"ns6$th $ts $n+est"rs an' st"!,h"%'ers
( Are the frms fnan!$a% manaerse=per$en!e' an' 6e%% tra$ne'
( Is the frms 'e#t s$t*at$"ne=!e%%ent
FINANCE2ACCOUNTING AUDITCHEC.LIST
-
7/25/2019 Chapter 4 - Internal Assessment
62/90
PRODUCTION AND
OPERATIONS
-
7/25/2019 Chapter 4 - Internal Assessment
63/90
Production8operations %unction !"ns$sts " a%% th"se a!t$+$t$es that trans"rms $np*ts
$nt" ""'s an' ser+$!es
'ea%s 6$th $np*ts1 trans"rmat$"ns1 an' "*tp*ts that
+ar& a!r"ss $n'*str$es an' mar,ets(0ive 0unctions8Decision Areas
Pr"!ess
Capa!$t&
In+ent"r& @"r,"r!e
*a%$t&
PRODUCTION2OPERATIONS
THE )ASIC FUNCTIONS 3DECISIONS5
-
7/25/2019 Chapter 4 - Internal Assessment
64/90
THE )ASIC FUNCTIONS 3DECISIONS5@ITHIN PRODUCTION2OPERATIONS
-
7/25/2019 Chapter 4 - Internal Assessment
65/90
IMPLICATIONS OF VARIOUS STRATEGIESON PRODUCTION2OPERATIONS
PRODUCTION2OPERATIONS
-
7/25/2019 Chapter 4 - Internal Assessment
66/90
:( Are s*pp%$es " ra6 mater$a%s1 parts1 an's*#assem#%$es re%$a#%e an' reas"na#%e
-
7/25/2019 Chapter 4 - Internal Assessment
67/90
RESEARCH AND
DEVELOPMENT
RESEARCH AND DEVELOPMENT
-
7/25/2019 Chapter 4 - Internal Assessment
68/90
The fth ma7"r area " $nterna%"perat$"ns that sh"*%' #ee=am$ne' "r spe!$f! strenth an'
6ea,nesses $s resear!h an''e+e%"pment 3R4D5
RESEARCH AND DEVELOPMENTFUNCTION
RESEARCH AND DEVELOPMENT
-
7/25/2019 Chapter 4 - Internal Assessment
69/90
r!ani"ation invest in R9D$ecause'
The& #e%$e+e $t 6$%% %ea' t" a s*per$"r
pr"'*!t an' ser+$!e It 6$%% $+e them !"mpet$t$+e a'+antae
Impr"+$n man*a!t*r$n pr"!ess t"re'*!e !"st
Impr"+$n pr"'*!t 0*a%$t&
RESEARCH AND DEVELOPMENTFUNCTION
RESEARCH AND DEVELOPMENT
-
7/25/2019 Chapter 4 - Internal Assessment
70/90
The "+era%% m$ss$"n " Resear!h an'De+e%"pments*pp"rt$n e=$st$n #*s$nesses
%a*n!h$n ne6 #*s$nesses'e+e%"p$n ne6 pr"'*!ts
$mpr"+$n pr"'*!t 0*a%$t&
$mpr"+$n man*a!t*r$n e>!$en!&
#r"a'en$n te!hn"%"$!a% !apa#$%$t$es
RESEARCH AND DEVELOPMENTFUNCTION
-
7/25/2019 Chapter 4 - Internal Assessment
71/90
Internal Research and DevelopmentAn "ran$8at$"n "perates $ts "6n R4D'epartment
Contract Research andDevelopmentA frm h$res $n'epen'ent resear!hers "r
$n'epen'ent aen!$es t" 'e+e%"p spe!$f!pr"'*!ts
FORMS OF R4D
R4D SPENDING AT TEN SAMPLE
-
7/25/2019 Chapter 4 - Internal Assessment
72/90
R4D SPENDING AT TEN SAMPLECOMPANIES
RESEARCH AND DEVELOPMENT
-
7/25/2019 Chapter 4 - Internal Assessment
73/90
:( D"es the frm ha+e R4D a!$%$t$es Are the&a'e0*ate
-
7/25/2019 Chapter 4 - Internal Assessment
74/90
MANAGEMENT
INFORMATION S/STEMS
MANAGEMENT INFORMATION
-
7/25/2019 Chapter 4 - Internal Assessment
75/90
Purpose t" $mpr"+e the per"rman!e " an enterpr$se#& $mpr"+$n the 0*a%$t& " manaer$a%
'e!$s$"ns
An ee!t$+e $n"rmat$"n s&stem th*s!"%%e!ts1 !"'es1 st"res1 s&nthes$8es1 an'
presents $n"rmat$"n $n s*!h a mannerthat $t ans6ers $mp"rtant "perat$n an'strate$! 0*est$"ns(
MANAGEMENT INFORMATIONS/STEMS
MANAGEMENT INFORMATION
-
7/25/2019 Chapter 4 - Internal Assessment
76/90
Data are $np*t t" the s&stem an'trans"rme' $nt" an "*tp*t(
Data #e!"me $n"rmat$"n "n%& 6henthe& are e+a%*ate'1 f%tere'1 !"n'ense'1ana%&8e'1 an' "ran$8e' "r a spe!$f!p*rp"se1 pr"#%em1 $n'$+$'*a%1 "r t$me(
MANAGEMENT INFORMATIONS/STEMS
MANAGEMENT INFORMATION
-
7/25/2019 Chapter 4 - Internal Assessment
77/90
:( D" a%% manaers $n the frm *se the$n"rmat$"n s&stem t" ma,e 'e!$s$"ns
-
7/25/2019 Chapter 4 - Internal Assessment
78/90
J( Are strate$sts " the frm am$%$ar 6$th the$n"rmat$"n s&stems " r$+a% frms
K( Is the $n"rmat$"n s&stem *ser-r$en'%&
( D" a%% *sers " the $n"rmat$"n s&stem*n'erstan' the !"mpet$t$+e a'+antaes that$n"rmat$"n !an pr"+$'e frms
( Are !"mp*ter tra$n$n 6"r,sh"ps pr"+$'e'"r *sers " the $n"rmat$"n s&stem
:;(Is the frms $n"rmat$"n s&stem !"nt$n*a%%e$n $mpr"+e' $n !"ntent- an' *ser-r$en'%$ness
MANAGEMENT INFORMATIONS/STEMS AUDIT
-
7/25/2019 Chapter 4 - Internal Assessment
79/90
VALUE CHAIN ANAL/SIS
-
7/25/2019 Chapter 4 - Internal Assessment
80/90
Value chain analysis (VCA5 reers t" the pr"!ess 6here#& a frm 'eterm$nes
the !"sts ass"!$ate' 6$th "ran$8at$"na% a!t$+$t$esr"m p*r!has$n ra6 mater$a%s t" man*a!t*r$n
pr"'*!t3s5 t" mar,et$n th"se pr"'*!ts a$ms t" $'ent$& 6here %"6-!"st a'+antaes "r
'$sa'+antaes e=$st an&6here a%"n the +a%*e!ha$n r"m ra6 mater$a% t" !*st"mer ser+$!ea!t$+$t$es
!an ena#%e a frm t" *rther $'ent$& $ts "6nstrenths an' 6ea,nesses 1 espe!$a%%& as!"mpare' t" !"mpet$t"rs +a%*e !ha$n ana%&sesan' the$r "6n 'ata e=am$ne' "+er t$me
VALUE CHAIN ANAL/SIS 3VCA5
-
7/25/2019 Chapter 4 - Internal Assessment
81/90
Core CompetenceA +a%*e !ha$n a!t$+$t& that a frm per"rmsespe!$a%%& 6e%%
Distinctive Competence@hen a !"re !"mpeten!e e+"%+es $nt" a ma7"r!"mpet$t$+e a'+antae
VALUE CHAIN ANAL/SIS
TRANSFORMING VALUE CHAIN
-
7/25/2019 Chapter 4 - Internal Assessment
82/90
ACTIVITIES INTO SUSTAINEDCOMPETITIVE ADVANTAGE
-
7/25/2019 Chapter 4 - Internal Assessment
83/90
Benchmar#in!an ana%&t$!a% t""% *se' t" 'eterm$ne 6hethera frms +a%*e !ha$n a!t$+$t$es are !"mpet$t$+e!"mpare' t" r$+a%s an' th*s !"n'*!$+e t"6$nn$n $n the mar,etp%a!e
enta$%s meas*r$n !"sts " +a%*e !ha$na!t$+$t$es a!r"ss an $n'*str& t" 'eterm$ne9#est pra!t$!es? am"n !"mpet$n frms "r
the p*rp"se " '*p%$!at$n "r $mpr"+$n *p"nth"se #est pra!t$!es(
)ENCHMAR.ING
-
7/25/2019 Chapter 4 - Internal Assessment
84/90
THE INTERNAL FACTOREVALUATION 3IFE5
MATRI
THE INTERNAL FACTOR EVALUATION
-
7/25/2019 Chapter 4 - Internal Assessment
85/90
Internal 0actor :valuation (I0:)/atri;A strate& "rm*%at$"n t""% that
s*mmar$8es an' e+a%*ates the ma7"rstrenths an' 6ea,nesses $n the*n!t$"na% areas " a #*s$ness an'pr"+$'es a #as$s "r $'ent$&$n an'e+a%*at$n re%at$"nsh$ps am"n th"seareas(
THE INTERNAL FACTOR EVALUATION3IFE5 MATRI
FIVE STEPS IN DEVELOPING AN IFE
-
7/25/2019 Chapter 4 - Internal Assessment
86/90
,tep ' 2ist #ey internal %actors asidenti&ed in the Internal
-
7/25/2019 Chapter 4 - Internal Assessment
87/90
,tep -' Assi!n a wei!ht that ran!es%rom =*= (not important) to *= (all