Podcast
Questions and Answers
What is the primary focus of the Resource-Based View (RBV) in strategic management?
Which of the following is NOT a basic function included in an internal audit?
What are the three categories of internal resources according to the Resource-Based View (RBV)?
Which factor is essential for a resource to be considered valuable in the context of RBV?
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What is the significance of conducting a financial ratio analysis in the context of an internal audit?
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What is a key component of customer analysis?
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Which of the following stakeholders primarily influences pricing decisions?
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What is the main focus of marketing research?
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What does product and service planning not typically include?
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Which step is not part of the cost/benefit analysis process?
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Study Notes
Internal Strategic-Management Audit
- Objective: Gather and interpret information about the company's management, marketing, finance/accounting, production/operations, research and development, and management information systems.
- Purpose: Provide an understanding of how each department contributes to the overall organization.
Resource-Based View (RBV)
- Core principle: Internal resources are more crucial than external factors in achieving and sustaining competitive advantage.
- Key resource categories: Physical resources, human resources, and organizational resources.
- Resource criteria for value: Rare, hard to imitate, not easily substitutable.
Marketing
- Definition: The process of understanding and meeting customer needs and wants for products and services.
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Functions:
- Customer analysis: evaluating consumer needs and desires through surveys, market positioning analysis, and customer profiling.
- Product and service planning: activities like testing, positioning, warranties, packaging, quality control, and customer service.
- Pricing: setting competitive prices considering consumer, government, supplier, distributor, and competitor influences.
- Distribution : managing warehousing, channels, coverage, retail locations, inventory levels, transportation, and sales territories.
- Marketing research: Gathering, recording, and analyzing data related to the marketing of goods and services.
Cost/Benefit Analysis
- Application: Assessing the costs, benefits, and risks associated with marketing decisions.
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Process:
- Calculate total costs.
- Estimate total benefits.
- Compare total costs with total benefits.
Finance/Accounting Functions
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Core decisions:
- Investment: Allocating and reallocating capital and resources.
- Financing: Determining the best capital structure for raising capital.
- Dividend: Deciding the percentage of earnings paid to stockholders, the stability of dividends, and stock repurchase or issuance.
Production/Operations
- Definition: Activities transforming inputs into goods and services.
- Management focus: Inputs, transformations, outputs across industries and markets.
Research and Development (R&D)
- Purpose: Investing to develop superior products or services to achieve "first mover" or "late mover" advantages.
- Forms: Internal R&D and external R&D.
Benchmarking
- Definition: An analytical tool comparing a firm's value chain activities against competitors to identify best practices and areas for improvement.
- Process: Measuring costs of value chain activities across an industry.
Internal Factor Evaluation (IFE) Matrix
- Purpose: Evaluate the company's internal strengths and weaknesses.
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Steps:
- List key internal factors identified during the internal audit.
- Assign weights from 0.0 (not important) to 1.0 (most important).
- Assign ratings from 1 (major weakness) to 4 (major strength).
- Multiply each factor's weight by its rating to get a weighted score.
- Sum the weighted scores for each variable to get the total weighted score.
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Interpretation:
- Total weighted score below 2.5 indicates a weak internal position.
- Total weighted score above 2.5 suggests a strong internal position.
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Description
This quiz focuses on the Internal Strategic-Management Audit, highlighting the importance of internal resources in strategic planning. Understanding how different departments contribute to the organization is key to leveraging the Resource-Based View (RBV) for competitive advantage. Test your knowledge on management, marketing, and resource allocation.