Evaluating Company Resources and Competitive Capabilities

Situation AnalysisTechniques of evaluatingA companys resource capabilitiesRelative cost positionCompetitive strength compare to the rivals

Five Questions of Situation AnalysisHow well is the companys present strategy working?

What are the companys resource strengths and weaknesses and its external opportunities and threat

Five Questions of Situation AnalysisAre the companys prices and costs competitive?How strong is the companys competitive position relative to its rivals?What strategic issues does the company face?

What are the Companys S, W, O, TAnalyzing a firms resource strengths and weaknesses and its external opportunities and threats is known as SWOT analysis

Through SWOT analysis it is possible to find out whether a firms business position is fundamentally healthy or unhealthy

What are the Companys S, W, O, TThe job of the SWOT analysis is to-

Identify companys strengths and resource capabilities

Identify companys weaknesses and resource deficiencies

What are the Companys S, W, O, TIdentify company competencies

Identify companys market opportunities

Identify the threats to companys future profitability

companys strengths and resource capabilitiesA strength is something a company is good at doing or a characteristic that gives it enhanced competitiveness

A company may have strengths in different areas

companys strengths and resource capabilitiesA skill or important expertise:Low-cost manufacturing capabilitiesStrong e-commerce expertiseTechnological know-howA proven track record in defect free manufacturingConsistency in customer service

companys strengths and resource capabilitiesValuable physical assets:State-of-the-art plants and equipmentsAttractive real estate locationsWorld wide distribution facilities

companys strengths and resource capabilitiesValuable human assets:A experience and capable workforceTalented employees in key areasMotivated and energetic employeesCutting-edge knowledge and intellectual capital

companys strengths and resource capabilitiesValuable organizational assets:Proven quality control systemKey patentMineral rightA base of loyal customerHigh credit rating

companys strengths and resource capabilitiesValuable intangible assets:Brand name imageCompany reputationBuyer good will

companys strengths and resource capabilitiesCompetitive capabilitiesShort development times in bringing new products to marketA strong dealer networkStrong partnership with key suppliers

companys strengths and resource capabilitiesAchievement or attribute that put a company in a position of market advantage:Low overall costMarket share leadershipA superior productWide product selection

companys strengths and resource capabilitiesAlliance or cooperative venture:

companys weaknesses and resource deficienciesA weakness is something a company lacks or does poorly in comparison to others that puts it at a disadvantage

A companys internal weaknesses can be found in different ways

companys weaknesses and resource deficienciesDeficiencies in competitively important skills or expertise or intellectual capitalA lack of competitively important physical, organizational, or intangible assetsMissing or weak competitive capabilities is key areas

companys weaknesses and resource deficienciesA weakness may or may not make a company competitively vulnerable, depending on how much the weakness matters in the market place and,

Whether it can be overcome by the resources and strengths in the companys possession

company competenciesCompany competence and competitive capabilitiesIdentifying and evaluating *what a company is really good at doing *what capabilities it has for competing is a critical component of assessing a companys situation

company competenciesA competence is the product of *learning and *experience and *represents real proficiency in performing an internal activity

company competenciesA company competence becomes a meaningful competitive capability when customer consider the competence valuable and beneficialIt help differentiate a company from its competitorsIt enhance its competitiveness

company competenciesFew other related issues to company competence:Core competenceDistinctive competenceCompetitive advantageCompetitive value

Core competence

A core competence is something that a company does well relative to other internal activities

Distinctive competence

Distinctive competence is something a company does well relative to competitors

Core competence & Distinctive competenceWhether a companys core competence represent a distinctive competence depends on how good the competence is relative to what competitors are capable ofIs it a competitively superior competence or just a standout internal company competence

Competitive advantageA distinctive competence empowers a company to build competitive advantage

Competitive value

How valuable the competitive advantage is depends on the competitive value

To evaluate the competitive value of a particular companys competitive advantage it is important to address four question

Competitive value

Is the resource hard to copy?How long does the resource last?Is the resource really competitively superior?Can the resource be trumped by different resources/capabilities of rivals?