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19 Cards in this Set
- Front
- Back
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internal analysis
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the purpose of internal analysis is to pinpoint the strengths and weaknesses of the organization
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internal analysis includes assessments of:
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the firm's resources and capabilities
distinctive competencies |
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strengths
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assets that boost profitability
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weaknesses
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liabilities that depress profitability
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how profitable a company becomes depends on three basic factors
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value or utility the customer gets
price that is charged costs of creating product |
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consumer surplus
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the excess utility a consumer captures beyond the price paid
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basic principle
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the more utility that consumers get from a company's products or services, the more pricing options the company has
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efficiency
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outputs/inputs
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quality
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reliable and perceived to have higher value
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product innovation
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creates products that customers perceive as more valuable
increases the company's pricing options |
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process innovation
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creates value by lowering production costs
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successful innovation can be a major source of:
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competitive advantage by giving a company something unique
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superior responsiveness to a customer
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leads to brand loyalty and premium pricing
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qbenchmarking
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comparing company performance against that of competitors and the company's historic performance
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net profit
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total revenues - total costs
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the durability of competitive advantage depends on (3)
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barriers to imitation
capability of competitors industry dynamism |
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why companies fail
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inertia
prior strategic commitments the icarus paradox |
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inertia
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companies find it difficult to change their strategies and structures
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the icarus paradox
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a company can become so specialized and inner directed based on past successes that it loses sight of market realities
salespeople |
