Internal AnalysisStrategic Management Chapter 4Section 092; Team 5Matthew Tawfiq, Jacqueline Henderson, Paul Briseno, Richard Alven1Internal Analysis DefinedProcess of evaluating organizations resources and capabilities

Why?In order to formulate appropriate and effective strategies you have to know what an organization can and cannot do well, and what assets it has or does not haveResources to Organizational CapabilitiesResources are useless on their own

Organizational Capabilities various routines and process that transforms resources into outputs

Organizational Routines and Processes Regular, predictable, and sequential work activities done by organizational membersCreate a Competitive AdvantageCapabilities involve interactions between people, people, and resources.

Must get right combination and routines down

Cant just gather resources! Have to use them properly!

Dynamic Capabilities

An organizations ability to build, integrate and reconfigure capabilities to address rapidly changing environments

Southwest vs. DeltaCore CompetenciesAny major value-creating capabilities organizations have that are essential to their business are as core competencies

Enhance organizations capabilities

Distinctive CapabilitiesSpecial and unique capabilities that distinguish an organization from its competitors

Disney Distinct CapabilitiesTheme parks that offer rides, entertainment, food, onsite lodging and packages.These are things traditional theme parks do not offer.Distinct CapabilitiesContributes to superior customer service

Can be used in a variety of ways

Is difficult for competitors to imitateCompetitive AdvantageCompetitive advantage sets organization apart from others

Affects performance results positively

Internal AnalysisStrengths: Resources and capabilities developed into sustainable competitive advantage

Weaknesses: Resources and capabilities that are lacking or deficient and prevent the organization from developing sustainable competitionTypes of Internal AnalysisValue Chain

Internal Audit

Capabilities Profile

Value ChainSystematic way of examining all the organizations functional activities and how well they create customer value

Internal AuditA thorough assessment of an organizations internal areasAssess resources and capabilities from all perspectivesDetermine what company is capable of and what it is not capable of.Internal AuditOrganizational FunctionsProduction-OperationsMarketingFinancial-AssetsManagementInfo SystemsOrganizational ElementsStrategic ManagementOrganizational StructureOrganizational CultureCapabilities Assessment ProfileDetermining Strategical WeaknessesInternal Analysis reflects strengths and weaknessesHow are your competitors doing?Compare capabilities to see how you stack up.Public informationForbes, FortuneMarketing reportsGrey ZoneBorderline CriminalTrash, spying

Why is an Internal Analysis Important Only way to identify strengths and weaknesses

Needed for making good strategic decisions