Thursday, May 25, 2017

Internal Analysis and Long-Term Objectives

Value Chain Analysis (VCA), Resource Based View (RBV) and SWOT (Strengths, weaknesses, opportunities and threats) analyses are all ways for a business to develop a sense of who they are, how they operate in their particular environment and set themselves up for sustained success in the future. VCA is an analysis that separates the business into different types of assets from inception or received inputs and follows the analysis all the way through to the end product and customer value (Pearce & Robinson, 2016). This analysis is broken down into primary and support activities where primary activities are the activities performed to actually create the service or product such as logistics, manufacturing, service, etc. Support activities are activities that assist the operation of the company providing the infrastructure for success such as human resources, research, technology, etc. By performing such a detailed analysis on an entire business, a company can learn what might be working well and what might be lagging behind the rest of the industry.
“SWOT is an acronym for the internal Strengths and Weaknesses of a firm, and the environmental Opportunities and Threats facing that firm. SWOT analysis is a technique through which managers create a quick overview of a company’s strategic situation” (Pearce & Robinson, 2016). This analysis is widely known and used for a number of different applications ranging from a personal insight level all the way to a major corporation. Firms can use the analysis to understand where they stand on a particular process or asset in relation to the industry or a particular competitor as well as looking internally on areas to pour more resources in developing. For example, if a company has been outsourcing design for a number of years but through analysis find they have more than enough capability to manage design internally, the firm might find it beneficial to increase resources internally.

The last analysis discussed is Resource Based View (RBV). This analysis is much like a SWOT analysis but looks at resource allocation and assets of a business while putting them up against the industry looking for benchmark opportunities (Pearce & Robinson, 2016).  Understanding how another competitor is allocating resources is especially important when looking for competitive advantages. Companies that operate too many manufacturing facilities might find a competitor doing as well or better with less.

The book mentions Ford Motors as a great example in reinventing themselves through hard economic times. Personally, I find it very interesting that they looked at Toyota’s advantages and found ways to do it better than them coming out of a recession. However, I love discussing the rebranding example Target completed in the late 90’s that also applies in this conversation as well. When Target was looking internally to find ways to separate themselves from the rest of the competition such as Walmart and K-Mart, they struck deals with high end designers to sell lower end versions of their clothes (Business Insider, 2011). This essentially took Target a level above other department stores and created their own niche. Before Target decided to do this, they likely looked at the businesses around them through analysis and found ways to develop the competitive edge needed to succeed.
Pearce, J., Robinson, R. (2016-01-02). Strategic Management, 13th Edition. [Kaplan]. Retrieved from
Aquino, J. (2011). The 10 Most Successful Rebranding Campaigns Ever. Business Insider. Retrieved 17 May 2017, from

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