Evaluating Company

Resources and Competitive

Capabilities

Situation Analysis
Techniques of evaluating
A companys resource capabilities
Relative cost position
Competitive strength compare to
the rivals

Five Questions of Situation

Analysis

How well is the companys present

strategy working?

What are the companys resource

strengths and weaknesses and its
external opportunities and threat

Five Questions of Situation

Analysis

Are the companys prices and costs

competitive?
How strong is the companys
competitive position relative to its
rivals?
What strategic issues does the
company face?

What are the Companys

S, W, O, T
Analyzing a firms resource strengths
and weaknesses and its external
opportunities and threats is known as
SWOT analysis
Through SWOT analysis it is possible to
find out whether a firms business
position is fundamentally healthy or
unhealthy

What are the Companys

S, W, O, T
The job of the SWOT analysis is to

Identify companys strengths and

resource capabilities

Identify companys weaknesses

and resource deficiencies

What are the Companys

S, W, O, T

Identify company competencies

Identify companys market

opportunities

Identify the threats to companys

future profitability

companys strengths and

resource capabilities
A strength is something a company
is good at doing or a characteristic
that gives it enhanced
competitiveness
A company may have strengths in
different areas

companys strengths and

resource capabilities

A skill or important expertise:

Low-cost manufacturing capabilities
Strong e-commerce expertise
Technological know-how
A proven track record in defect free
manufacturing
Consistency in customer service

companys strengths and

resource capabilities

Valuable physical assets:

State-of-the-art plants and
equipments
Attractive real estate locations
World wide distribution facilities

companys strengths and

resource capabilities

Valuable human assets:

A experience and capable workforce
Talented employees in key areas
Motivated and energetic employees
Cutting-edge knowledge and
intellectual capital

companys strengths and

resource capabilities

Valuable organizational assets:

Proven quality control system
Key patent
Mineral right
A base of loyal customer
High credit rating

companys strengths and

resource capabilities

Valuable intangible assets:

Brand name image
Company reputation
Buyer good will

companys strengths and

resource capabilities

Competitive capabilities
Short development times in
bringing new products to market
A strong dealer network
Strong partnership with key
suppliers

companys strengths and

resource capabilities

Achievement or attribute that put

a company in a position of market
advantage:
Low overall cost
Market share leadership
A superior product
Wide product selection

companys strengths and

resource capabilities

Alliance or cooperative venture:

companys weaknesses and

resource deficiencies
A weakness is something a company
lacks or does poorly in comparison
to others that puts it at a
disadvantage
A companys internal weaknesses
can be found in different ways

companys weaknesses and

resource deficiencies

Deficiencies in competitively
important skills or expertise or
intellectual capital
A lack of competitively important
physical, organizational, or
intangible assets
Missing or weak competitive
capabilities is key areas

companys weaknesses and

resource deficiencies
A weakness may or may not make a
company competitively vulnerable,
depending on how much the
weakness matters in the market
place and,
Whether it can be overcome by the
resources and strengths in the
companys possession

company competencies
Company competence and
competitive capabilities
- Identifying and evaluating
*what a company is really good at doing
*what capabilities it has for competing
is a critical component of assessing a
companys situation

company competencies
A competence is the product of
*learning and
*experience and
*represents real proficiency in
performing an internal activity
-

company competencies

A company competence becomes a

meaningful competitive capability
when customer consider the
competence valuable and beneficial
It help differentiate a company from
its competitors
It enhance its competitiveness

company competencies

Few other related issues to

company competence:
Core competence
Distinctive competence
Competitive advantage
Competitive value

Core competence
A core competence is something
that a company does well relative
to other internal activities

Distinctive competence
Distinctive competence is something
a company does well relative to
competitors

Core competence &

Distinctive competence
Whether a companys core
competence represent a distinctive
competence depends on how good
the competence is relative to what
competitors are capable of
Is it a competitively superior
competence or just a standout
internal company competence

Competitive advantage
A distinctive competence empowers
a company to build competitive
advantage

Competitive value
How valuable the competitive
advantage is depends on the
competitive value
To evaluate the competitive value of
a particular companys competitive
advantage it is important to address
four question

Competitive value

Is the resource hard to copy?

How long does the resource last?
Is the resource really competitively
superior?
Can the resource be trumped by
different resources/capabilities of
rivals?