Internal Analysis of Firms

The process of analyzing a firm's internal characteristics to identify its strengths and weaknesses.

A firm's core identity, encompassing its purpose, characteristics, and traits.

The stage of development a company is in, from its early years to maturity.

The size of a company relative to its competitors, typically measured by revenue, assets, or employees.

The range of products, markets, and customer groups a company serves.

The ownership structure and control of a company, whether public or private.

The geographical area a company operates in, whether local, national, or global.

The key variables used to understand a firm's internal strengths and weaknesses. Examples include customer experience, revenue, and profitability.

Activities that directly create and deliver a product or service to customers.

Activities that support and enable the primary activities, ensuring smooth operations.

Activities related to designing, producing, and delivering the final product to the customer.

Activities focused on promoting and selling the product to customers.

Activities that cater to the customer after the sale, ensuring product satisfaction and continued use.

The process of acquiring resources like raw materials, machinery, and services needed for production.

Activities related to developing, managing, and optimizing technologies for products, processes, and overall management.

Activities focused on managing the workforce, including recruitment, training, motivation, and compensation.

A strategic profile shouldn't be seen as absolute. A firm's strengths/weaknesses are relative to its rivals.

Comparing a firm's performance against benchmarks like industry averages, main competitors, or an ideal profile.

The possibility of complacency in top management, where self-criticism is avoided.

A snapshot of a firm's strengths and weaknesses at a given point in time.

The process of breaking down a firm's activities into key operations needed to sell a product or service.

The value created by a firm's operations exceeding the costs incurred.

The larger system encompassing a firm's value chain, including suppliers and customers.

The purpose of analyzing a value chain is to pinpoint specific activities contributing most to overall value generation.

Perfect coordination between suppliers and a firm's production systems, enabling the reduction of intermediate inventories and costs.

The breakdown of a firm's value chain activities into more specific and detailed components, enabling the identification of potential competitive advantages.

A strategic approach that emphasizes a firm's internal resources and capabilities as the foundation for competitive advantage, particularly in dynamic and turbulent environments.

The differences in resources and capabilities possessed by firms, leading to variations in their strategic potential.

The notion that resources and capabilities are not equally accessible to all firms, creating competitive advantage for those with unique assets.

The process of providing and developing resources and capabilities to support a firm's strategic goals and objectives.

The identification and measurement of a firm's resources and capabilities to assess its potential for developing a successful strategy.

The information system, including the integration of systems within the firm and its suppliers/customers, plays a crucial role in optimizing and coordinating activities, especially in just-in-time environments.

The process of investing in employees' knowledge, skills, and abilities, which is considered the most crucial source of knowledge for a company.

A corporate structure that allows knowledge to flow easily and facilitates learning throughout the organization.

A set of policies aimed at attracting, developing, and retaining employees who are committed to the company's long-term success.

A culture that promotes values and beliefs that support the accumulation of specialized knowledge and a constant drive for improvement.

The strategic use of a company's resources and capabilities in its current operations to gain a competitive advantage.

The strategic allocation of a company's resources and capabilities to different activities, potentially expanding beyond its core business.

The process of expanding a company's scope by introducing new products or entering new markets.

The ability to employ a company's valuable resources and capabilities to achieve business objectives.

Synergy in related diversification happens when companies share or transfer resources and capabilities between their different businesses. This helps improve profitability by leveraging strengths across multiple areas.

Internationalization uses a firm's resources and capabilities to expand operations into new countries. It leverages existing strengths to capture opportunities in foreign markets.

Marketing resources and capabilities that are not core to a company's competitive advantage can be a source of revenue. This allows companies to monetize their expertise and assets.

SWOT analysis is a strategic framework that helps companies analyze their internal strengths and weaknesses, as well as external opportunities and threats. It helps design strategies to maximize opportunities and minimize risks.

A SWOT analysis is conducted at the beginning of the strategic process as a brainstorm or at the end as a summary of findings. It provides a high-level overview of the firm's strengths, weaknesses, opportunities, and threats.