1 / 22

Internal Analysis

Internal Analysis . Internal Analysis. Strategic Managers must evaluate the Internal Environment of the organization. What is the process? Identify and classify variables within an organization as strengths or weaknesses. STRENGTH = factor that is better than: past performance

zayit
Download Presentation

Internal Analysis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Internal Analysis

  2. Internal Analysis • Strategic Managers must evaluate the Internal Environment of the organization. • What is the process? • Identify and classify variables within an organization as strengths or weaknesses.

  3. STRENGTH = factor that is better than: • past performance • key competitors • industry as a whole • WEAKNESS = factor that is worse than: • past performance • key competitors • industry as a whole

  4. Approaches for scanning and analyzing Internal Variables • Functional Analysis • Value Chain Analysis • Core Competencies Analysis

  5. Functional Analysis

  6. Management 1. General Management 2. Human Resource Management

  7. General Management Factors • Structure of the organization • Organizational Culture • Record in Achieving Objectives • Top management skills, capabilities, & interests. • Reputation of the Organization and Top Management • Social Responsibility record

  8. Human Resource Management • Number of employees • Unionization • Employee skills and morale • Quality of Work/Life Issues • Recent downsizings • Recognition/promotion/reward systems • Training programs; educational reimbursement

  9. Operations (Manufacturing or Service Firms) • Quality Initiatives • Quality certifications • Policies and procedures for quality • Six sigma quality = 3.4 manufacturing defects per million items • Location of facilities • Outsourcing • Flexible manufacturing • Raw material costs and availability

  10. Operations - Continued(Manufacturing or Service) • Economies of scale • decreasing fixed costs/ unit when producing more • Economies of scope • common parts of different products manufactured together. • Re-engineering • Percentage of cost of goods sold to sales

  11. Information Systems • Chief Information Officer • Network Capabilities • Hardware and software upgrades • Y2K compliance & costs • Internet page • quality; features

  12. Research and Development • Expenditures • Over time • In relation to competitors/industry • Percentage of sales • Product to market time • Own labs/facilities or lease?

  13. Finance • Currency risk management • Global impact • Financing decisions

  14. Financial Ratios

  15. Value Chain Analysis

  16. Firm Infrastructure general management,accounting finance Human Resource Management recruiting, training, development Technology Development R&D, product and process improvement Procurement purchasing raw materials; machines, supplies Support Activities Profit Margin Service instal- lation, repair, replace- ment Inbound Logistics raw matl handling ware- housing Operations machining assembling testing packaging Outbound Logistics ware- housing distri- bution Marketing and Sales advertising promotion pricing channel relations PRIMARY ACTIVITIES

  17. Core Competencies Core Competencies

  18. Core Competencies of the Corporation • Real sources of advantage - not based on businesses. • management’s ability to consolidate corporatewide technologies and production into competencies. • Core competencies are collective learning in the organization, especially: • how to coordinate diverse production skills by integrating multiple streams of technologies.

  19. Three tests to identify core competencies • Provide potential access to a wide variety of markets. • Make a significant contribution to the perceived customer benefits of the end product. • Are difficult to imitate.

  20. Engines Powertrains Optics Imaging Microprocessor controls Cars; motorcycles; lawn mowers; generators Copiers; laser printers; cameras; image scanners; medical imaging examples Core Competencies Products/businesses

  21. More kinds of core competencies: • Systems Integration • Virtual reality • Bioengineering • Delighting the customer

  22. Purpose of Internal Analysis • Identify and evaluate what’s going on inside the firm. • The goal is to assess what are strengths and what are weaknesses. • Critical in making decisions about the future of the organization.

More Related