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Module 3 Analysis of a company's resources and competitive position 1
Evaluate a company's current strategy.
Evaluate how well a company's current strategy is working
Competitive orientation of the company.
The 4 general strategies.
Competitiveness of the company within the industry.
What is your geographic market?
Whether in a single industry tier OR integrated vertically across multiple tiers.
Recent moves by the company to improve competitive position and performance.
are
E.g. Lower prices, enter a new geographic market, merge with a competitor.
2
Evaluate how well a company's current strategy is working
Evaluation of a company's strategy
Qualitative point of view
quantitative point of view
E.g. its completeness, relevance, internal consistency. The proof of how well the company's strategy works is its results.
Two BEST empirical indicators:
Whether the company is achieving its stated financial and strategic goals.
Whether the company is above the industry average.
3
Evaluate how well a company's current strategy is working
Persistent failure to meet organizational performance goals and poor performance
Poor strategic development
Less than competent implementation of the strategy.
The stronger a company's current overall performance, the less likely it will need radical strategy changes. The weaker a company's financial performance and market position, the more its current strategy needs to be questioned. Poor performance is almost always a sign of poor strategy, poor execution, or both.
4
SWOT-Analyse
Strengths and weaknesses and their external opportunities and threats. A simple but powerful tool. It forms the basis for devising a strategy that makes the best use of the company's resources, aimed directly at exploiting the company's best opportunities and defending itself against threats to its well-being.
5
Identify the strengths of the company's resources and competitiveness.
Strength: Something a company is good at or a trait that makes it more competitive.
A fortress can take different forms:
competitive assets. Please note the readings
The strength of a company's resources represents competitive advantages. A company's competencies can range from a simple competency in performing a job to a core competency or a distinct competency:
competence
core competency
distinctive competence
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Identify the strengths of the company's resources and competitiveness.
Some skills and abilities simply make it possible to survive in the market: most competitors have them.
The lack of competition and the skills of competitors can lead to a competitive disadvantage.
Core competencies are more competitive than competencies: they give more power to a company's strategy and have a greater impact on its position and profitability.
An activity that a company does quite well.
Distinctive Competition: Occasionally, a company may have an exceptionally strong competitive advantage that has the potential to create competitive advantage and add value to buyers.
The activity that allowed the company to enjoy superiority.
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Identify the strengths of the company's resources and competitiveness.
The importance of strong competence for strategy development:
The competitively valuable capability it brings to a company.
Its potential to be a pillar of strategy.
The competitive advantage it can generate in the market.
It is easier to build a competitive advantage when a company has a strong competency in performing an activity critical to market success.
When competing companies do not have equalization powers.
When it is costly and time consuming for competitors to imitate the competition.
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What is the competitiveness of a Resource Fortress?
The competitiveness of a company's strength is measured by how many of the following four tests it can pass.
Is the strength of the resource difficult to duplicate?
Does the strength of attraction last? Does it have staying power?
Is the resource really competitive?
Can the resource strength be outweighed by the different resource strengths and competitiveness of the competitors? 9
Identify company resource weaknesses and competitive deficiencies
A weakness or lack of competition
something that one company lacks or does poorly in comparison to others.
A condition that puts you at a disadvantage in the market.
A company's weaknesses relate to:
Inferior or unproven skills, experience or intellectual capital in competitive areas of the company.
Deficiencies in competitive physical, organizational or intangible assets.
Lack of or competitive inferior skills in key areas.
10
Identify company resource weaknesses and competitive deficiencies
Competitive Liability
Internal weaknesses, deficiencies in a company's complementary resources.
Almost all companies have competitive liabilities.
Whether a company's resource weakness makes it competitive depends on how important it is in a market and whether it is offset by the strengths of other companies. The ideal condition is that the company's competitive advantages outweigh its competitive liabilities.
The 50-50 balance is definitely not the desired state.
11
Identify a company's market opportunity.
Market opportunities are an important factor in shaping corporate strategy. Managers cannot adequately tailor strategy to the company's situation without first identifying opportunities and evaluating each one's growth and profit potential. The company's opportunities can be plentiful or scarce, ranging from (Rank)
Extremely attractive ("MUST" pursue)
Interesting on the side: Opportunities for growth and earning are questionable
Insufficient: because there is no good combination with the strength and capabilities of the company.
12
Identify a company's market opportunity.
Managers must be careful to see every industry opportunity as a business opportunity because
Not all companies are equipped with the resources to successfully capitalize on every opportunity that presents itself in their industry.
Some companies are better placed to take advantage of a particular opportunity than others.
Targeting a company's resource base to position it to compete for attractive growth opportunities is something strategists need to pay particular attention to.
13
Identify a company's market opportunity.
The most relevant market opportunities for a company are those that are a good fit with the company's financial and organizational resources, offer the best growth and profitability, and offer the greatest potential for competitive advantage. dr Masayuki Kondo
The company rarely innovates alone in this age of business without corporate boundaries.
Select some strategic technological fields and focus your technological efforts on them to compete in the highly competitive global market.
Invest in different areas and options, because from different technological areas a new technology can emerge that replaces the current technologies of this company.
14
Identify threats to a company's future profitability.
Certain factors in a company's external environment pose a threat to its profitability and competitive well-being.
Threats
Emergence of cheaper or better technologies.
Introduction of new or improved products by competitors.
The entry of lower-cost foreign competitors into a company's market strength.
New regulations that are more onerous for a company than its competitors
Vulnerability to rising interest rates
The potential for a hostile takeover.
Adverse demographic changes
Unfavorable exchange rate changes.
Political upheavals in a foreign country where the company has facilities.
fifteen
Identify threats to a company's future profitability.
It is management's job to identify threats to the future well-being of the company and to assess what strategic actions can be taken to neutralize or reduce their impact.
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SWOT – Identify, Infer, Act Strategically. Identify the company's resource strengths and competitive capabilities. Identify the company's resource weaknesses and competitive deficits. Identify the company's market opportunities. Identify external threats to the company's future well-being
Conclusions on the general business situation of the company: • Where does the attractiveness of the company's situation fall on the scale from “worryingly weak” to “extremely strong”? • What are the attractive and unattractive aspects of the company's situation? Measures to improve corporate strategy: • Use the strengths and capabilities of the company as a pillar of strategy. • Find the market opportunities that best match the company's strengths and capabilities. • Correct weaknesses and deficiencies that prevent seeking key market opportunities or increase vulnerability to external threats. • Leverage organizational strengths to mitigate the impact of major external threats.
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SWOT – Identify, draw conclusions, translate into strategic actions.
The strength of a company's resources generally forms the cornerstone of strategy, as it represents the company's best chance of success in the marketplace. Strategies that stress areas where the company is weakest or has unproven capacity are suspect and should be avoided. If a company does not have the resources and competitive ability to devise an attractive strategy, managers must
Update existing organizational resources and skills and add more OR as needed
To acquire them through companies OR
Strategic alliances with companies that have the necessary experience.
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SWOT – Identify, draw conclusions, translate into strategic actions
Managers must seek to correct competitive weaknesses that make the company vulnerable, reduce profitability, or prevent it from pursuing an attractive opportunity.
To develop a solid strategy, you must review the available market opportunities and tailor the strategy to capture those that are most attractive and fit the company's circumstances. Rarely does a company have the resources to take advantage of all available market opportunities at the same time without over-spreading.
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Company prices and costs – competitive
One of the most telling indicators of whether a company's business position is strong or weak is whether its prices and costs are competitive with those of its peers in the industry.
Price competition is particularly critical in a resource industry where the value offered to buyers is the same from seller to seller: Price competition is often the dominant market force, with lower cost firms having an advantage. twenty
Company prices and costs – competitive
Competing companies must keep their costs under control and ensure that any additional costs they incur and any markups they charge create sufficient value for the buyer. For a company to compete, its costs must match those of its closest competitors. While certain costs of inequality are justified as long as the products or services of closely competing firms are sufficiently differentiated.
A high-cost firm's market position becomes increasingly threatened as its costs exceed those of its close competitors.
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Company prices and costs – competitive
The value chain involves a mark-up because a mark-up over the cost of conducting the firm's value-added activities is often part of the price (full cost) borne by buyers.
A fundamental goal of any business is to create and deliver value to buyers whose margin over costs yields an attractive profit.
Breaking down a company's operations into primary and supporting activities reveals the main elements of the company's cost structure.
Every activity in the value chain generates costs and immobilizes assets; Allocate operating costs and company assets to each individual activity in the chain. Cost Estimates and Capital Requirements.
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Company prices and costs – competitive
Activities are linked in such a way that how one activity is performed can affect the cost of performing other activities. The sum of the costs of all the different activities in a company's value chain defines the company's internal cost structure. The cost of each activity contributes to whether the company's overall cost position compares favorably or unfavorably to its competitors. The task of value chain analysis and benchmarking is to develop the data to compare a firm's activity-by-activity cost to the costs of its main competitors and learn which internal activities are a source of cost advantages and disadvantages. A company's relative cost position is a function of how the overhead of the activities it undertakes in the course of doing business compares to the overhead of its competitors' activities.
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Company prices and costs – competitive
A company's value chain is embedded in a broader system of activities that includes the value chains of its suppliers and its distribution channel partners involved in bringing its product or service to end consumers. Accurately assessing a company's competitiveness in end-user markets requires that company managers understand the entire value chain system for delivering a product or service to end-users, not just the company's own value chain. 24
Company prices and costs – competitive
Knowledge of supplier value chains is relevant because suppliers perform activities and incur costs when creating and delivering purchased inputs used in a company's value chain. The cost, performance, and quality of these inputs affect a company's own costs and product differentiation capabilities. Anything a company can do to help its suppliers reduce costs from value chain activities, or improve the quality and performance of the items they supply, can improve its own competitiveness - a key reason when managing the Supply chain activities Working in partnership with suppliers.
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Company prices and costs – competitive
Direct channel and customer value chains are relevant because
The costs and margins of the company's distribution partners are part of the price to be paid by the end user.
The activities of the sales partners affect the satisfaction of the end consumer.
For this reason, companies usually work closely with their direct sales partners (direct customers) to carry out activities in the value chain in mutually beneficial ways. 26