INTERNAL ANALYSIS
Internal analysis involves assessing the internal resources, capabilities,
and performance of the organization to identify strengths and
weaknesses
DISTINCTIVE COMPETENCIES
Distinctive competencies are unique strengths or capabilities that set a
company apart from its competitors
COMPETITIVE ADVANTAGE Competitive advantage refers to the
factors that allow a company to outperform its rivals and achieve
superior performance in the market
PROFITABILITY
Profitability is a measure of how effectively a company generates
profit relative to its expenses and investments
ROOT OF COMPETITIVE ADVANTAGE
The roots of competitive advantage lie in a company's ability to
leverage its unique strengths, capabilities, and resources to
outperform competitors and achieve superior performance in the
market
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Distinctive competencies
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Resource base
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Strategic positioning
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Innovation and adaption
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Customer focus and relationships
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Operational excellence
DISTINCTIVE COMPETENCIES
Distinctive competencies are unique strengths or capabilities
possessed by a company that set it apart from competitors and
contribute to its competitive advantage
SUMMARY OF DISTINCTIVE COMPETENCIES
UNIQUE SKILLS AND EXPERTISE- distinctive competencies often stem
from specialized skills, knowledge, or expertise that are unique to the
company.
PROPRIETARY TECHNOLOGY OR INTELLECTUAL PROPERTYcompanies may possess proprietary technology, patents, trademarks
or other forms of intellectual property.
STRONG BRAND REPUTATION AND CUSTOMER LOYALTY- building a
strong brand reputation and cultivating customer loyalty can be a
distinctive competency.
OPERATIONAL EXCELLENCE- distinctive competencies can also arise
from operational excellence and efficiency in ares such as
management, logistics, or customer service.
INNOVATION AND R&D CAPABILITIES- companies with a culture of
innovation and strong research and development capabilities often
have distinctive competencies.
CUSTOMER FOCUS AND RELATIONSHIP- distinctive competencies can
also stem from a deep understanding of customer needs preferences
and behaviors.
STRATEGIC ALLIANCES AND PARTNERSHIP- collaborative relationships
with suppliers, distributors, or other strategic partners can be a
distinctive competency
DISTINCTIVE COMPETENCIES & COMPETITIVE ADVANTAGE
Distinctive competencies are the unique strengths, capabilities, or
resources that set a company apart from its competitors.
Competitive advantage refers to the factors that allow a company to
outperform its rivals and achieve superior performance in the market
---distinctive competencies--2 COMPLEMENTARY SOURCES
RESOURCES
Resources refer to the tangible and intangible assets that a company
possesses, which can be used to create value and gain a competitive
advantage.
CAPABILITIES
Capabilities refer to a company's ability to effectively coordinate and
utilize its resources to achieve desired outcomes and competitive
advantage.
THE ROLE OF STRATEGY
The role of strategy is fundamental in guiding a company's actions,
decisions, and resource allocation to achieve its objectives and gain a
competitive advantage in the marketplace
KEY ROLES OF STRATEGY
SETTING DIRECTION AND OBJECTIVES- strategy provides a roadmap
for the organization by defining its long term vision, mission, and goals
CREATING COMPETITIVE ADVANTAGE- strategy helps identify the
company’s distinctive competencies, strengths, and opportunities for
differentiation.
ALLOCATING RESOURCES- strategy involves making choices about
where to allocate the company’s resources, including financial capital,
human capital and other assets.
MANAGING RISKS AND UNCERTAINTY- strategy involves assessing
and mitigating risks associated with market dynamics, competitive
threats, and external factors.
DRIVING INNOVATION AND CHANGE- strategy fosters a culture of
innovation and continuous improvement by encouraging
experimentation, learning, and adaptation.
ALIGNING ACTIVITIES AND FUNCTIONS- strategy ensures alignment
and coherence across different functions and activities within the
organization.
MONITORING AND EVALUATION- strategy provides a framework for
monitoring performance,tracking progress towards goals, and
evaluating the effectiveness of initiatives.
VALUE CHAIN
A business model that describes the full range of activities needed to
create a product or service.
Compensation & Benefits- HRM involves designing and administering
compensation packages and benefits offerings to attract, motivate,
and retain employees
Employee Relations- HRM focuses on fostering positive relationships
between employees and the organization.
Workforce Planning- HRM involves forecasting future talent needs
based on organizational goals and market trends
Diversity & Inclusion- HRM emphasizes creating an inclusive workplace
culture that values and respects differences among employees.
HR Technology & Analytic- HRM leverages technology and data
analytics to streamline HR processes, improve decisionmaking, and
enhance employee experiences
Compliance & Risk Management- HRM ensures compliance with labor
laws, regulations, and ethical standards to mitigate legal and
reputational risks.
RESEARCH & DEVELOPMENT
is the lifeblood of innovation within any organization. It's not just
about creating new products or services; it's also about improving
existing ones, optimizing processes, and staying ahead of the
competition
INTERNAL ANALYSIS OF RESEARCH & DEVELOPMENT
CAPABILITIES- assess the skill sets and expertise of the R&D team.
RESOURCES- analyzes the budget allocated to R&D activities
INFRASTRUCTURE- evaluate the R&D infrastructure, testing facilities,
and collaboration tools.
PROCESSES- review the R&D processes and methodologies.
INTELLECTUAL PROPERTY- examine the organization’s intellectual
property portfolio resulting from R&D efforts.
PERFORMANCE METRICS- define key performance indicators(KPIs) to
measure the success of R&D initiatives.
COLLABORATION- assess the level of collaboration between R&D and
other departments, such as marketing, sales, and production.
RISK MANAGEMENT- identify potential risks and challenges associated
with R&D activities.
CULTURE- evaluate the organizational culture and its impact on R&D
efforts.
ALIGNMENT WITH STRATEGY- ensure that R&D activities align with
the organization’s overall strategic goals and objectives.
HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM) refers to the systematic
approach to managing an organization's human capital to achieve
strategic objectives
INTERNAL ANALYSIS OF HUMAN RESOURCE MANAGEMENT
RECRUITMENT & SELECTION- HRM involves identifying workforce
needs, attracting qualified candidates, and selecting the best-fit
individuals for vacant positions within the organization
Training & Development- HRM focuses on providing employees with
the necessary knowledge, skills, and abilities to perform their jobs
effectively.
Performance Management- HRM includes processes for setting
performance expectations, monitoring employee performance,
providing feedback, and recognizing achievements.
Culture & Engagement- HRM focuses on cultivating a positive
organizational culture and high levels of employee engagement.
ANALYZING COMPETITIVE ADVANTAGE AND PROFITABILITY
VALUE CREATION
Competitive advantage and profitability are directly linked to a
company's ability to create value for its customers
SUSTAINABILITY
Sustainable competitive advantage ensures that a company can
maintain its position in the market over the long term
RESOURCE ALLOCATION
Analyzing profitability helps companies allocate resources effectively
RISK MANAGEMENT
Understanding competitive advantage and profitability also enables
companies to identify and mitigate risks
INVESTOR CONFIDENCE
Investors, shareholders, and other stakeholders rely on assessments of
competitive advantage and profitability to measure a company's
performance and prospects
STRATEGIC DECISION-MAKING
Competitive advantage and profitability inform strategic
decisionmaking across various aspects of the business, from product
development and marketing to operations and finance
FRAMEWORK FOR CONDUCTING ANALYSIS IN COMPETITIVE
ADVANTAGE AND PROFITABILITY
IDENTIFY COMPETITIVE ADVANTAGE
Competitive advantage refers to the unique strengths and capabilities
that enable a company to outperform its rivals and achieve superior
performance
VALUE CHAIN ANALYSIS
Conduct a value chain analysis to identify the primary and support
activities that contribute to the creation of value within the
organization
PORTER'S FIVE FORCES ANALYSIS
Use Porter's Five Forces framework to assess the competitive
dynamics of the industry
FINANCIAL PERFORMANCE ANALYSIS
Evaluate the company's financial performance using key metrics such
as revenue growth, profitability margins, return on investment (ROI),
and cash flow
SWOT ANALYSIS
Conduct a SWOT analysis to identify the company's strengths,
weaknesses, opportunities, and threats.
BENCHMARKING
Compare the company's performance and practices to industry peers
and best-in-class competitors.
STRATEGIC FIT
Evaluate the alignment between the company's competitive
advantage and its strategic goals and objectives
FRAMEWORK FOR CONDUCTING ANALYSIS IN COMPETITIVE
ADVANTAGE AND PROFITABILITY
RELATIONSHIP OF COMPETITIVE ADVANTAGE & PROFITABILITY
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CAUSES & EFFECT
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MUTUAL REINFORCEMENT
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COMPETITIVE PRESSURES
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MARKET DYNAMICS
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STRATEGIC DECISION MAKING