Kasika

Topics: Strategic management, Management, Marketing Pages: 56 (15446 words) Published: November 28, 2010
Thompson−Gamble−Strickland: Strategy: Winning in the Marketplace: Core Concepts, Analytical Tools, Cases, Second Edition

II. Core Concepts and Analytical Tools

3. Analyzing a Company’s Resources and Competitive Position

© The McGraw−Hill Companies, 2005

CHAPTER 3
Analyzing a Company’s Resources and Competitive Position
Before executives can chart a new strategy, they must reach common understanding of the company’s current position. —W. Chan Kim and Rene Mauborgne The real question isn’t how well you’re doing today against your own history, but how you’re doing against your competitors. —Donald Kress Organizations succeed in a competitive marketplace over the long run because they can do certain things their customers value better than can their competitors. —Robert Hayes, Gary Pisano, and David Upton Only firms who are able to continually build new strategic assets faster and cheaper than their competitors will earn superior returns over the long term. —C. C. Markides and P. J. Williamson

Thompson−Gamble−Strickland: Strategy: Winning in the Marketplace: Core Concepts, Analytical Tools, Cases, Second Edition

II. Core Concepts and Analytical Tools

3. Analyzing a Company’s Resources and Competitive Position

© The McGraw−Hill Companies, 2005

Chapter 2 we described how to use the tools of industry and competitive analysis to assess a company’s external environment and lay the groundwork for matching a company’s strategy to its external situation. In this chapter we discuss the techniques of evaluating a company’s internal circumstances and competitiveness—its resource capabilities, relative cost position, and competitive strength versus rivals. The analytical spotlight will be trained on five questions:

In

1. How well is the company’s present strategy working? 2. What are the company’s resource strengths and weaknesses and its external opportunities and threats? 3. Are the company’s prices and costs competitive? 4. Is the company competitively stronger or weaker than key rivals? 5. What strategic issues and problems merit front-burner managerial attention? In probing for answers to these questions, four analytical tools—SWOT analysis, value chain analysis, benchmarking, and competitive strength assessment—will be used. All four are valuable techniques for revealing a company’s competitiveness and for helping company managers match their strategy to the company’s own particular circumstances.

Evaluating How Well a Company’s Present Strategy Is Working In determining how well a company’s present strategy is working, a manager has to start with what the strategy is. Figure 3.1 shows the key components of a singlebusiness company’s strategy. The first thing to pin down is the company’s competitive approach. Is the company striving to be a low-cost leader or stressing ways to differentiate its product offering from rivals? Is it concentrating its efforts on serving a broad spectrum of customers or a narrow market niche? Another strategy-defining consideration is the firm’s competitive scope within the industry—what its geographic market coverage is and whether it operates in just a single stage of the industry’s production/ distribution chain or is vertically integrated across several stages. Another good indication of the company’s strategy is whether the company has made moves recently to improve its competitive position and performance—for instance, by cutting prices, improving design, stepping up advertising, entering a new geographic market (domestic or foreign), or merging with a competitor. The company’s functional strategies in R&D, production, marketing, finance, human resources, information technology, and so on, further characterize company strategy. While there’s merit in evaluating the strategy from a qualitative standpoint (its completeness, internal consistency, rationale, and relevance), the best quantitative evidence of how well a company’s strategy is working comes from its...
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