What are the firm’s sources of competitive advantage
Analysis of the Organization: How does the organization operate? What does the organizations structure look like? What are the firm’s sources of competitive advantage? Has the firm approached strategic management (i.e., market participation, market entry modes, location and configuration of specific functional/value chain activities, etc.) in a way that leverages its competitive advantage and/or potential for success? Does the firm follow a strategy appropriate for the matrix of environmental forces? Is the firm structured appropriately for the strategy? Is the firm’s leadership effective? Use these questions to develop a list of strengths and weaknesses and discuss why each is important
Also, you may want to add some of these:
1) Performance Analysis – You should make comparisons of key financial and Market data at both the corporate and business unit level with major competitors and/or industry averages. Compare key expenses to sales, such as percent R&D of sales, percent sales and administrative expense of sales, percent of accounts receivable of sales, and sales per employee or sales per store.
2) BCG Portfolio Mapping / Product Mission Matrix – Developing a matrix that compares variables between companies, such as product lines or financial results, is an easy way to illustrate differences. A simple two-by-two matrix sometimes illustrates 4 the relationships between variables. This can also be expanded into a larger matrix, sometimes referred to as portfolio mapping, such as those developed by the Boston Consulting Group. You can be creative with the mapping technique and use it for a variety of comparisons, such as a business compared with competitors, a SBU or product line compared with others within the same company, or SBU\’s compared to industry. You can modify the BCG techniques to fit your particular needs. Be sure to carefully label and identify the components used in mapping.
3) SWOT Analysis – A SWOT analysis is designed to identify the strengths and weaknesses of the company (internal factors) and the opportunities and threats for the company (external factors). A SWOT analysis is often a good starting point, but you need to draw conclusions as a result of the analysis. For example, is the company in a strong competitive position? What can it do to turn weaknesses into strengths and threats into opportunities? Can it continue to pursue its current strategy in a profitable manner, or will the strategy need revision?
4) Competitive Strategy Models (Porter) – A useful point to begin the analysis of strategy is to use Porter\’s Competitive Strategy Model. Porter believes that to be successful, a company must select one of three generic models of competitive strategy. These are Low Cost Producer, Differentiation, and Focus or Niche. This can be followed by developing Porter\’s Five Forces Model. The Five Forces Model displays the major sources of competition.
5) Lease vs. Buy Decisions – There are many factors that influence the decision of whether to lease or purchase an asset. A cost comparison using net present value and cash flow evaluations of the two alternatives is helpful in reaching the appropriate decision.
6) Other Forms of Analysis –(a) Marketing plans should consider the 4 P\’s – product, price, promotion, place.(b) Learning/experience curve.(c) Economies of scale concept
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