Strategic Management

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Strategic management 3
Resource analysis, value chain, and strategic competences

Figure 4.1 Analysing strategic capability
Resource audit

Competences In separate activities Through linking activities Some are ... Rigidities Preventing change Core competences To outperform competition To create new opportunities Comparisons Historical Industry norms Benchmarking

Assessing balance Resources Competences Business units

Identifying key issues SWOT analysis Critical success factors

Understanding strategic capability

Identify core resources, competences
Resource Audit Resource Audit Audit Competences Audit Competences

Identify core resources Identify core resources

Identify core competences Identify core competences

Strategic capabilities Strategic capabilities

Comparisons Comparisons

Historical basis Historical basis

Industry Norms Industry Norms

Benchmarking Benchmarking

Identifying kes issues Identifying kes issues SWOT Analysis SWOT Analysis

Audit resources- core resources 1.
The resource audit identifies the resources „available” to an organisation in supporting The resource audit identifies the resources „available” to an organisation in supporting its strategies both from within and outside the organisation its strategies both from within and outside the organisation

Resources can be grouped Resources can be grouped

Physical resources Physical resources • • • Material assets • Material assets • Immobility • Immobility • Machines • Machines • Others • Others • Current assets • Current assets • Inventory • Inventory • Nature of assets • Nature of assets • age • age • condition • condition • location • location

Human resources Human resources • Number of employees • Number of employees • Skills • Skills • Education • Education • Experience • Experience • Loyalty • Loyalty •Corporate culture •Corporate culture

Financial resources Financial resources • Equity • Equity • Debt • Debt • Credibility • Credibility • Relationship with • Relationship with • Suppliers • Suppliers • Investors • Investors • Bankers • Bankers • Managing cash • Managing cash

Intangibles Intangibles • Goodwill • Goodwill • Loyalty of consumers • Loyalty of consumers • Brand name • Brand name • Good contacts with • Good contacts with • Politicians • Politicians • CEOs • CEOs • Corporate image • Corporate image

Analysing competences and core competences 1.
The competence undertake the activities of the organisation. It shows how to link the The competence undertake the activities of the organisation. It shows how to link the different activities together and how to deploy resources to sustain excellent performance different activities together and how to deploy resources to sustain excellent performance Bases of competences Cost efficiency Cost efficiency Economies of scale: offers the ability in mass consumer advertising, Economies of scale: offers the ability in mass consumer advertising, Supply costs: well managed input costs, with IT or personal networks Supply costs: well managed input costs, with IT or personal networks Experience: the cumulative experience decrease the R+D and unit costs Experience: the cumulative experience decrease the R+D and unit costs

Value added Value added

How well are matched the products/services to the identified needs of the How well are matched the products/services to the identified needs of the chosen customers. Value added activity must be done from the viewpoint chosen customers. Value added activity must be done from the viewpoint of the customer or user of the production or service. of the customer or user of the production or service.

Managing linkages Managing linkages

Competences are likely to be more robust and difficult to imitate if there Competences are likely to be more robust and difficult to imitate if there are linkages within the organisation’s value chain and linkages into the are linkages within the organisation’s value...
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