~ Evaluating A Company's Resources, Capabilities, and Competitiveness ~

NUR FILZAH BINTI SULAIMAN

TMA 2

1110820

MGB4013 STRATEGIC MANAGEMENT

Firstly, we discussed about MacDonald. After that, we also discussed about the specific indicators of strategic success. 

• Growth in firm's sales and market share.
• Acquisition and retention of customers.
• Strengthening image and reputation with customers.
• Increasing profit margins, net profits and return on investment.
• Growing financial strength and credit rating.
• Leadership in factors relevant to market or industry success.
• Continuing improvement in key measures of operating performance.

The Key Financial Ratio.

The core concept are :

A resource is a competitive asset that is owned or controlled by a firm.

A capability or competence is the capacity of a firm to perform and internal activity competently through deployment of a firm's resources.

A firm's resources and capabilities represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace.

Identifying Capabilities : An Organizational Capability

• Is the intangible but observable capacity of a firm to perform a critical activity proficiently using a related combination ( cross-functional bundle ) of its resources.
• Is knowledge-based, residing in people and in a firm's intellectual capital or in its organizational processes and functional systems, which embody tacit knowledge.

- Competitive advantage means that, there is a something that people can't imitate.

- Tacit knowledge means that, people indirectly learned something.

A resource bundle is a linked and closely integrated set of competitive assets centered around one or more cross-functional capabilities.

The VRIN tests for sustainable is Valuable, Rare, Inimitable, and Non-substitutable.

Casual ambiguity means that very hard to figure out how a complex resource contributes to competitive advantage.

Dynamic capability is the ongoing capacity of a firm to modify its existing resources and capabilities or create new one.

SWOT Analysis is a powerful tool for sizing up a firm's :

• Internal strength 
• Internal weaknesses
• Market opportunities
• External threats

SWOT Analysis involves :

• Drawing conclusions from the SWOT listing about the firm's overall situations.
• Translating these conclusions into strategic actions by the firm that :

1. Match its strategy to its internal strengths and to market opportunities.
2. Correct important weaknesses and defend it against external threats.

Figure 4.2 The steps involved in SWOT Analysis : Identify the four components of SWOT, draw conclusions, translate implications into strategic actions.

We move to the concept of a company value chain.

1. Identifies the primary internal activities that create and deliver customer value and the requisite related support activities.
2. Permits a deep look at the firm's cost structure and ability to offer low prices.
3. Reveals the emphasis that a firm places on activities that enhance differentiation and support higher prices.

A company's value chain identifies the primary activities and related support activities that create customer value.

Figure 4.3  A Representative Company Value Chain

Figure 4.4  A Representative Value Chain System

Benchmarking is a potent tool for improving a company's own internal activities that is based on learning how other companies perform them and borrowing their '' best practices ''

As a conclusion, I think that all I have learned from this topic. Basically its not hard to understand if I keep focus on the lecture and always do a revision. Thank you.