Deck 5: Organizational Analysis and Competitive Advantage

Question 1

Explain how using an IFAS table impacts the understanding of a company's internal resources and capabilities

Answer 1

An IFAS (Internal Factors Analysis Summary) table is a systematic way of evaluating the strengths and weakness of any organization. It helps to quantify these strengths and weaknesses so that their overall effect can be easily evaluated. Otherwise they are just statements in a report.
How this table does the analysis is explained below:
1) Column 1. This is where one lists all the strengths and weaknesses. There is no limit to how many items can be listed.
2) Column 2. Here one assigns the weightage that one feels is appropriate for that particular strength or weakness. The rationale behind why a particular weightage is given has to be mentioned in Column 5. The sum of all the weightages has to be 1 (one).
3) Column 3. Here one assigns a score or rating to each attribute. This is on a scale of 1-5 with 1= Poor and 5= Outstanding. The rationale for a particular score has to be mentioned I Column 5.
4) Column 4. This lists the product of the weightage multiplied by the rating. This column is totaled up to give the final score for the organization.
5) Column 5. This is like a remarks column with all the rationale for the weightages and ratings explained.
It has been seen that the average score for an average firm in an industry is usually around 3. Therefore if one's organization scores above 3 then one can assume that the company is dealing with the environmental factors internally very well.

Question 2

Today, the primary means of information collection is through the Internet. Try the following exercise.
Assign each person a separate task. One task might be to find the latest financial statements. Another would be to learn as much as possible about its top management and board of directors. Another might be to identify its business model. Another might be to identify its key competitors.

Answer 2

Not Answer

Question 3

What is the relevance of the resource-based view of the firm to strategic management in a global environment

Answer 3

The resource based view establishes a link between the resources of an organization and its strategies for implementation. Looking only for opportunities and threats to design a strategy is not sufficient to provide a competitive advantage to the organization. The company must also consider its internal resources i.e. critical strengths and weaknesses to design a strategy in order to take advantage of the opportunities available outside or to nullify the threats. There is no use of identifying the opportunities or threats if it does not have the resources to implement such a strategy. The resources of the company often decide where the company is heading in the future. Resource based view therefore suggests that differences in performances among companies can be explained best by differences in the corporate assets, resources of the companies and their application and not by industry structure identified by industry analysis.

Question 4

Today, the primary means of information collection is through the Internet. Try the following exercise.
Conduct research on the company using the Internet only.

Question 5

How can value-chain analy sis help identify a company's strengths and weaknesses

Question 6

Today, the primary means of information collection is through the Internet. Try the following exercise.
Meet with your team members to discuss what you have found. What are the company's opportunities, threats, strengths, and weaknessesGo back to the Internet for more information, if needed.

Question 7

In what ways can a corporation's structure and culture be internal strengths or weaknesses

Question 8

Today, the primary means of information collection is through the Internet. Try the following exercise.
Prepare a three- to five-page typed report of the company. The report should include the following:
a. Does the firm have any core competenciesAre any of these distinctive (better than the competition) competenciesDoes the firm have any competitive advantageProvide an analysis using EFAS and IFAS Tables.
b. What is the likely future of this firm if it continues on its current path
c. Would you buy stock in this companyAssume that your team has US$25,000 to invest. Allocate the money among the four to five primary competitors in this industry. List the companies, the number of shares purchased of each, the cost of each share as of a given date, and the total cost for each purchase assuming a typical commission used by an Internet broker, such as E-Trade or Scottrade.

Question 9

What are the pros and cons of management's using the experience curve to determine strategy

Question 10

How might a firm's management decide whether it should continue to invest in current known technology or in new, but untested technologyWhat factors might encourage or discourage such a shift

Question 11

How does the Resource-Based View of the Firm provide a superior means of evaluating a company's competitive advantage

Question 12

Today, the primary means of information collection is through the Internet. Try the following exercise.
Form into teams of around three to five people. Select a well-known publicly owned company to research. Inform the instructor of your choice.