Internal Analysis (Business Strategy)

Question 1:

Describe SWOT analysis as a way to guide internal analysis. How does this approach reflect the basic strategic management process? What are potential weaknesses and limitations of SWOT analysis?

1. SWOT analysis as a way to guide internal analysis. This approach reflect the basic strategic management process and potential weaknesses and limitations of SWOT analysis are

Manager needs to know how to “position” the organization in the face of the situation – whether it’s a problem or an opportunity. SWOT analyze internal resources and capabilities, current situation, current strategy. Once the SWOT. analysis has done manager can effective in maximizing strengths, minimizing weaknesses, capitalizing on opportunities, guarding against threats that helps to set reaffirm goals and develop action plan.

It emphasis on alternatives and offers a way of communication between group. . Each person or group offers a different perspective on the strengths and weaknesses and has different experiences of both. Hence collaboration is essential to develop strategic planning.

The potential weakness and limitation of SWOT analysis are:

  It gives more emphasis on strength

  It doesn’t quickly respond to changing circumstances.

Question 2:

What is benchmarking? How can benchmarking assist in strategy development and formulation?

2.  Benchmarking and benchmarking assist in strategy development and formulation

     Benchmarking is a process of comparing company specific performance with other company doing a same thing. It is the process of, collecting data, comparing performance, diagnosing problems and setting-up measures for improvement.

     Benchmarking use to identify the best practice in performing VCA and gives Information about how can we achieve competitive advantage over rivalry. It find out best practice of competitor and use these information to develop new best practices for organization. It focus on continuously improvement on activity.  Benchmarking helps to learn other company success and failure, depending upon these information organization develop new strategy. It also does internal analysis and inform manager to know which practice are more crucial for organization success and manager include these information in strategy development and formulation.

Question 3:

Compare and contrast value chain analysis and the resource-based view of a firm. What are the objectives of each?

 3. Value chain analysis and the resource-based view of a firm and objectives of each are:

Value chain analysis focus on various activities that may add value to the final product which enhance customer satisfaction. They analyze these activities to reduce cost and to make differentiate from other. It is internal activities that transform input to output whereas RBV focus of using available tangible and intangible resources to deliver value to customers in an approach that competitor find it difficult to imitate. A firm has competitive advantage when it formulate strategy based on the firm’s resources that cannot be duplicated by competition.

The objective of VCA is to recognize, which activities are the most valuable to achieve competitive advantage.

The objective of RBV is to allocate and to make maximum utilization of available resources to earn competitive advantage.

Question 4:

Explain how you might use value chain analysis, resource-based view, three circles analysis, product life-cycle analysis, and SWOT analysis to get a better sense of what might be a firm’s key building blocks in attaining a strategic competitive advantage over competitors?

4. Value chain analysis, resource-based view, three circles analysis, product life-cycle analysis, and SWOT analysis use to get a better sense of building key blocks in attaining a strategic competitive advantage over competitors in form of.

All these analysis focus on internal activities, the analysis where a firm’s competitive advantages or disadvantages are.

• By analyzing chain of internal activities and improving it to add value in final product
• By managing available resources, skills and capabilities, according to the strengths and weaknesses of firm.
• By analyzing customer needs, how competitor offering and by satisfying customer need in better way than other.
• By changing strategy depending upon product life cycle for example building awareness in introduction and brand awareness in growth.
• By analyzing internal resources and capabilities and quickly responding to potential threat helps organization to build strategic competitive advantage.

Thus timely internal analysis and quickly responding external threat and formulating strategy based on above fact helps an organization to attain strategic competitive advantage over competitor

Bibliography:

Pearce, J. A., & Robinson, R. B. (2011). Strategy formulation: internal analysis. In Strategic Management: Formulation, Implementation and Control (12 edi) (pp. 137-167). New York: The McGraw- Hill.