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13 Cards in this Set
- Front
- Back
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What is the internal environment? |
The internal environment is the environment within the company. The strengths and weaknesses of a firm in a SWOT analysis. Along the value chain, the internal environment is the primary and secondary activities. Its what the firm can do and its potential. |
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Why is it important for firms to understand the internal environment? |
It’s important because it can help the company with their strategy, which ultimately affects their performance. Using value chain analysis, this can add value to a company through creating competitive advantages along the chain as well as efficiencies. |
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What are the advantages of a SWOT analysis? |
- The advantages of SWOT include forcing managers to consider both internal and external factors simultaneously. - Focusing on opportunities and threats make the firm proactive rather than reactive. - It also creates a link between the internal and external environment. - SWOT is simple as well. |
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What are the disadvantages of a SWOT analysis? |
- The disadvantages to SWOT are that it cannot show a company how to achieve a competitive advantage. The strengths identified may not lead to an advantage. SWOT’s focus on external environment is too narrow. - In addition, SWOT focuses on a single point in time, but competition among companies is constantly changing. - SWOT is just a starting point. - Lastly, SWOT places too much emphasis on one key feature, ignoring other factors. For example, Toyota focused on low cost and ignored quality, which led to losses for the company. |
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What is a resource? What is a capability? What is a core competency? How do they differ? |
- Resources are what the company has, like assets. - Capability is what a company can do. - A core competency is a particular strength of the company. - Resources give companies capabilities, which capabilities lead to a core competency. |
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What is the difference between tangible and intangible resources? |
- Tangible resources are easy to identify and they are the physical resources. - Intangible resources are hard to identify are they are embedded in routines or practices, such as HR, brand image and reputation. |
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Briefly describe the four criteria used to determine sustainability of competitive advantages. |
- Is the resource valuable?- Do they enable a firm to formulate and implement a strategy? - Is the resource rare? If everyone has it, it’s not rare. - Is the resource difficult to imitate? Physical uniqueness, path dependency, causal ambiguity, social complexity - Is the resource difficult to substitute? |
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What is a business Model? |
A design for the successful operations of a business, identifying revenue sources, customer base, products and details for financing. It’s how a company makes money. |
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What is the balanced scorecard? How can the development of a balanced scorecard help a company? |
- It’s a method of evaluating a firm’s performance using performance measures from the customers’, internal, innovation and learning, and financial perspectives. - A balanced scorecard provides a meaningful integration of the many issues that come into evaluating a firm’s performance. - It helps a company with a fast but comprehensive view of the business. - It enables a company to consider their company from 4 different perspectives. |
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How do financial ratios help understand the firm’s internal environment? Review the financial ratios and how they are used to understand the liquidity, financial leverage, and asset management of a firm. |
- The financial ratios help a firm analyze its financial position. They have to be analyzed using reference points and see how they change over time. Compare ratios to historical comparisons, industry norms, and key competitors. |
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Briefly describe the primary activities in a firm’s value chain. |
- The primary activities contribute to the physical creation of the product or service, its sale and transfer to the buyer, and its service after the sale. - Inbound logistics-receiving, storing distributing inputs to the product - Operations-activities associated with transforming inputs to final product, machining, packaging, assembly, testing, printing and facility operations. - Outbound logistics-collecting, storing, and distributing the product or service to buyers - Marketing and sales- - Service-activities to provide service to enhance or maintain the value of the product, such as installation, repair and product adjustment |
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Briefly describe the support activities in a firm’s value chain. |
- The secondary activities add value by themselves or add value through the relationship between primary activities and other support activities. - Procurement-purchasing inputs used in the firms value chain, such as raw materials and supplies - Technology development- activities associated with the development of new knowledge that is applied to the firms operations - Human resource management-activities involved in recruiting, hiring, training, development and compensation. - General administration- general mgmt, planning, finance, accounting, legal and gov affairs, quality mgmt, IS are examples. These activities support the entire value chain and not indiv activities. |
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Why do value chain analysis? |
The value chain analysis identifies activities that create value to the company. A firm is profitable when the value exceeds the cost associated. |
