Week 4

 1^st October 2013

Enhance your spirit

Assalamualaikum…

Today I’m coming again to update this blog about chapter four of strategic management.Chapter four titles are evaluating a company resources, capabilities and competitiveness. This chapter is describing through six questions under the title evaluating a firm’s
internal situation.

Firstly, the question is How well is the firm’s present strategy working? The Best indicator of a well-conceived, well-executed strategy which is the firm is achieving its stated financial and strategic objectives and the firm is an above-average industry performer. Nowadays, we can see product that become the market leader such as Colgate, Maggie, Shell, Nestle and others.

Secondly, the question asks what are the firm’s competitively important resources and capabilities? Resources can be whether tangible or intangible resources. Capability or also was called competence. Competitive assets or competitive advantage is the factor that people or other organizational cannot copy. The VRIN tests for sustainable competitive advantage ask if a resource is Valuable, Rare, Inimitable, and Non-substitutable.

Thirdly, the question require is the firm able to take advantage of market opportunities and overcome external threats to its external well-being? SWOT Analysis is a powerful tool for sizing up a firm’s internal strengths (the basis for strategy), internal weaknesses (deficient capabilities), Market opportunities (strategic objectives) and External threats (strategic defenses).

Question four is about are the firm’s prices and costs competitive with those of key rivals, and does it have an appealing customer value proposition? The vital term that we ought to highlight is value chain and benchmarking. The example company who use the concept of value chain is Unilever-tea, Coke, Dell and more. Dell for instance comes from all around the world because they seek supply from the country who can supply with lowest price.

Then we move to question five which is the firm competitively stronger or weaker than key rivals? A company’s competitive strength scores pinpoint its strengths and weaknesses against rivals and point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive vulnerabilities.

Lastly question six ask What strategic issues and problems merit front-burner managerial attention? The last question defines about Strategic “How to” Issues and Strategic “Should We” Issues. Zeroing in on the strategic issues a company faces and compiling a list of problems and roadblocks creates a strategic agenda of problems that merit prompt managerial attention.