Chapter 4 Worksheet
The purpose of the internal analysis is to assess the competitive capabilities and resources of the company under analysis. For each strategic factor
throughout the worksheet, conclusively state the specific nature of the strength or a weakness. This will strengthen your analysis and help you
with your subsequent SWOT analysis.
1. How well is the current strategy working?
In this section you must address the criteria and the 'how well' question simultaneously. For example, if the company uses a broad differentiation
strategy as their present strategy, how well is the differentiation strategy working for the company? For a broad differentiation strategy, I would
expect you to cite examples of adding value for the customer and other stakeholders. Then I expect you to determine how well they are
implementing the strategy.
Criteria
What is strategy?
 How does management
intend to grow the
business?
 How will the company
build loyal clientele and
outcompete rivals?
 How will each functional
area operate?
 How will the company
improve performance?
What is the company’s
business model?
What are the present
strategies? (Note: This
question applies to the
corporate, business and
functional levels of the
organization. Choose one of
the five generic strategies
discussed in Chapter 5.)
What are the company’s
proactive strategy initiatives?
What are the company’s
Facts
Analysis
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Chapter 4 Worksheet
Conclusions
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reactive strategy initiatives?
Assess the company’s relative
performance using the three
tests for a winning strategy.
- Goodness of fit (GOF)
- Competitive advantage
(You must answer question 2
below before analyzing the
company’s competitive
advantages.)
- Performance
(You must address the
objectives question and
financial analysis question
below before you analyze the
company’s performance.)
To address GOF, you must
analyze the SWOT. If the
majority of the intersections
are in the S-O quadrant, the
company has a good fit. For
the CA test, you must first
complete question 2 in
Chapter 4. Your responses to
the four tests of competitive
value determine whether or
not the company passes the
CA test. For the performance
test, you must examine the
company’s actual
performance. Look at their
financial ratios and their
relative performance. When
you have the facts, it is much
easier to conduct your
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
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analysis.
What is the company’s
competitive scope
 stages of the industry's
production-distribution
chain it operates,
 geographic market
coverage, and
 size and composition of
the customer base?
 Please add other facets of
competitive scope as
necessary.
You are supposed to examine
the company’s competitive
scope from the perspective of
how the competitive scope is a
competitive capability within
the overall framework of how
well is the current strategy
working. From your analysis,
identify the particular
strengths or weaknesses
associated with the
competitive scope strategy.
What are the functional
strategies (use chapter 10 for
additional guidance)
 Production,
 Marketing.
 Finance,
 Human resources,
 R&D,
 Etc.?
Start by listing the functional
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Chapter 4 Worksheet
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areas; then provide the facts
associated with each of the
areas. Finally, conduct your
analysis and determine how
well the functional areas are
working and the associated
strengths and weaknesses.
You are supposed to examine
the company’s functional
strategies from the perspective
of how the strategies provide a
competitive capability within
the overall framework of how
well the current strategy is
working. You are supposed to
determine the strengths or
weaknesses associated with
the strategies. Determining
the strategy is working is the
first step. Your analysis of
why is the strategy working or
not working will identify the
strengths or weaknesses.
Has the company achieved its
financial objectives?
Determine if they achieved
their short and long-term
objectives and provide the
supporting analysis why they
did or did not achieve the
objective. Then you are in a
position to determine the
associated strengths or
weaknesses.
Has the company achieved its
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
Chapter 4 Worksheet
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strategic objectives?
Determine if they achieved
their short and long-term
objectives and provide the
supporting analysis why they
did or did not achieve the
objective. Then you are in a
position to determine the
associated strengths or
weaknesses.
What is the company's
position relative to EACH of
its competitors?
 Technology
 Product innovation
 Customer service
 Product quality
 Delivery time
 Price
 New product time to
market
 Please add other facets
of relative position as
necessary.
Is the company demonstrating
improvement in internal
performance measures (e.g.
days of inventory,
productivity, unit cost, defect
rate, delivery times, warranty
costs)?
What is the firm’s image and
reputation with customers?
If the strategy is not working,
is it due to:
 Weak strategy and/or
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Chapter 4 Worksheet
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
Poor implementation
Evaluating the five phases of the strategy process
How effective is the company in each phase of the strategy making process?
Criteria
Facts
Developing a mission and
vision
Setting objectives
Crafting a strategy to achieve
the objectives and vision
Implementing and executing
the strategy
Monitoring developments,
evaluating performance, and
making corrective
adjustments
Revising phases 1-4 in light
of actual performance,
changing conditions, new
opportunities and new ideas
Analysis
Conclusion
2.
What are the company's resource strengths and weaknesses?
The purpose of this tool is to assess the competitive values of the company's resources. The four tests of competitive value are:
 Is the resource hard to copy?
 How long does the resource last?
 Is the resource really competitively superior?
 Can the resource be trumped by a rival's resources/capabilities?
If you can answer the first three questions in the affirmative and the last question with a no, then decide if the resource is the basis for a
competitive advantage. As a minimum, for each of the resource types listed below, assess the competitive value of each resource.
To address the resource strengths and weaknesses question, you must answer all four questions for each of the criteria. For example, answer
all four questions for proprietary technology. Then answer all four questions for advertising and promotion. Continue with the same approach for
each of the criteria. You must also provide solid logic and analysis in your responses. Why are you answering yes or no to each of the four
questions? After completing your analysis, you can determine if the company under analysis has CAs or strengths.
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
Chapter 4 Worksheet
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Please identify all of competitive advantages. All of the CAs are strengths. A company may have a resource strength that is not a CA. Identify all
of the company’s strengths and weaknesses.
Criteria
Facts
Analysis
Conclusions
Please note the following
criteria are examples to get
you started. You should add
the applicable resources for
each category.
Skills and expertise
 Proprietary technology
 advertising and promotion
 product innovation
 ability to improve
production processes
 technological know-how
Physical assets
 plant capacity
 plant and equipment age
and technological
capabilities
 plant and retail location
 access to distribution
channels
 global distribution
capability
 ownership of valuable
natural resources
Human assets
 Superior intellectual
capital
 Experienced and capable
workforce
 Talented employees in key
areas
 Cutting-edge knowledge
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in technology or other
important areas of the
business
 Collective learning
embedded in the
organization
 Proven managerial knowhow
Organizational asset
 Proven quality control
systems
 Proprietary technology
 Key patents
 State-of-the-art systems
for doing business
 Ownership or important
natural resources
 A cadre of highly trained
customer service
representatives
 A strong distribution
and/or retail network
 financial position
Intangible asset
 image
 brand name
 reputation for customer
service
 buyer loyalty
 technological leadership
Competitive capabilities
 cost advantages
 market share leadership
 superior products/services
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
Chapter 4 Worksheet
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
wider/deeper product line
than rivals
 wide geographic coverage
 sophisticated use of ecommerce
 award-winning customer
service
Alliances or cooperative
ventures
3A. Are the company's prices and costs competitive?
This question applies to all companies independent of the strategy (cost or differentiation) they use to compete in their industry. Using the
following criteria, assess each step in the value chain (inbound logistics and supplies, operations, outbound logistics, sales and marketing, service,
R&D, human resources, general and administrative) and compare each step with the competitor's prices and costs. After completing this analysis,
examine the value chain as a whole. How does the integration of each successive step in the value chain lower costs? Finally, assess the value
chain of the company in the context of the industry.
Address each cost driver for each step in the value chain. Concentrate on how the company uses the cost drivers to reduce costs. Make sure you
list the associated strengths and weaknesses in their cost savings activities through executional drivers.
Inbound
Operations Outbound Sales and
Service
Profit
R&D
HRM
A&G
Logistics
Logistics
Marketing
Margin
Structural cost drivers
 Scale economies
 Learning curve
 Technology
requirements
 Capital intensity
 Product line
complexity
 Etc.
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
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Executional cost drivers
 Commitment to
continuous
improvement
 Product quality
 Process quality
 Capacity
utilization
 Internal business
processes
 Working with
buyers and
suppliers on costs
 Etc.
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
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3B. If the company uses either a differentiation or best-value strategy, also assess how each step in the value chain creates or adds value (e.g.
incorporates product attributes and user features, raises performance, increases buyer satisfaction) and how the integration of each successive step
in the value chain increases value. Provide the supporting analysis to determine how the company adds value and develops specific strengths and
weaknesses. Pleas list the strengths and weaknesses.
Criteria
Inbound
Logistics
Operations
Outbound
Logistics
Sales and
Marketing
Service
Profit
Margin
R&D
HRM
A&G
 Incorporate product
attributes and user
features that lower the
buyer's overall costs of
using the company's
product
 Incorporate features
that raise the
performance a buyer
gets out of the product,
 Increase features that
enhance buyer
satisfaction in noneconomic or intangible
ways
 Deliver value to
customers via
competitive capabilities
that rivals do not have
or cannot afford to
match
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4. How strong is the company's competitive position?
Although I provide only one column for competitors, you should add the number of columns necessary to assess each of the competitors.
Key success
weight
Company
Competitors
factors (Refer
rating
Weighted
rating
Weighted
to Q 6 in the
score
score
external
analysis (ch3
worksheet)
5. What strategic issues does the company face?
The following are typical issue areas.
This is not an exclusive list of areas.
You should provide additional strategic
issues based on your analysis of the
environment and the company's
competitive capabilities and resources.
Is the present strategy adequate in light of
driving forces present in the industry?
To address this question, look at the
SWOT analysis. If most of the
intersections are in the S-O quadrant, you
can conclude that the company’s strategy
is adequate. If the intersections are in the
other quadrants, your conclusions should
be different.
Facts
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
Chapter 4 Worksheet
Analysis
Conclusions
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Is the company’s present strategy geared
to the industry's future key success
factors?
Please start with the industry KSFs you
identified in the question 6 of the Chapter
3 worksheet. Use the KSFs as the starting
point for your analysis. Then determine
how well the company performs each of
the KSFs. If the company has high
performance on each KSF, their current
strategy is geared to the industry’s future
key success factors.
Does the present strategy protect the
company against external threats and
internal weaknesses?
This criterion is asking you to analyze the
intersection of the external threats and the
company’s strengths and weaknesses in
the SWOT matrix. You have to list the
threats and, strengths and weaknesses as
the starting point for conducting the
analysis.
If the majority of the intersections are in
the strengths-threats portion of the matrix,
then the company’s current strategy
protects them. If the majority of the
intersections are in the weaknesses-threats
portion of the matrix, then the strategy
will not protect them.
Is the company vulnerable to competitive
attack by one or more rivals?
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
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Does the company have competitive
advantages (Refer to your responses to
question 2 above.) or must it offset the
competition's competitive advantages?
What are the strong and weak parts of the
current strategy?
What additional moves are necessary to:
 Improve costs
 Capitalize on emerging
opportunities
 Boost the company's competitive
position
6. Financial ratio analysis for the company and industry
Specifically state the strengths and weaknesses that you find through your analysis of the financial ratios.
7. Top Management’s values and perspectives
How are the personal ambitions, business philosophies, and ethical beliefs of managers stamped on the company's strategy and
competitive capabilities? Specifically state the strengths and weaknesses that you find through your analysis of Top Management’s values
and perspectives.
8. Organization’s culture
How do the company's values, policies and culture impact the strategy, strategy implementation and company's competitive capabilities?
Specifically state the strengths and weaknesses that you find through your analysis of the organization’s culture.
9. SWOT Matrix
The external and internal analyses provide you with information you need to tailor the strategy for a particular company. The external analysis
provided you with the opportunities and threats for the industry and the company. The internal analysis revealed the company's competitive
capabilities (strengths and weaknesses).
To tailor the strategy, you want a fit between the company's capabilities and the environment's constraints and opportunities. To conduct the
SWOT, look for the points of intersection between opportunities and strengths and weaknesses. S-O intersections enable a company to exploit the
opportunity. W-O intersections require the company to address the weakness in order that they may fully exploit the opportunity. S-T
intersections allow the company to defend against the threat. Strengths spent on defending against threats detract from the company's ability to
use that particular resource for exploiting opportunities. W-T intersections jeopardize the company. These intersections require the company to
Crafting and Executing Strategy: Concepts and Cases, McGraw-Hill. NY. 17th Edition
Chapter 4 Worksheet
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bolster the weakness in order to provide defensive capabilities. Depending on the immediacy of the threat, these intersections may require the
company's immediate attention.
Threat # 5
Threat # 4
Threat # 3
Threat # 2
Threat # 1
Opportunity #5
Threats
Opportunity #4
Opportunity #3
Opportunity #3
Opportunity #1
Opportunities
Strength # 1
Strengths
Strength # 2
Strength # 3
Strength # 4
Strength # 5
Weaknesses # 1
Weaknesses
Weaknesses # 2
Weaknesses # 3
Weaknesses # 4
Weaknesses # 5
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