Internal Strategic Management Audit
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Internal Strategic Management Audit

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@GainfulIsland

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Questions and Answers

What is the primary focus of the Resource-Based View (RBV) in strategic management?

  • Maximizing external market factors
  • Minimizing production costs
  • Outsourcing operational activities
  • Internal resources as the key to competitive advantage (correct)
  • Which of the following is NOT a basic function included in an internal audit?

  • Management
  • Production/operations
  • Customer engagement (correct)
  • Finance/accounting
  • What are the three categories of internal resources according to the Resource-Based View (RBV)?

  • Technological, financial, and human
  • Intellectual, operational, and external
  • Natural, industrial, and informational
  • Physical, human, and organizational (correct)
  • Which factor is essential for a resource to be considered valuable in the context of RBV?

    <p>It must be rare and not easily substituted</p> Signup and view all the answers

    What is the significance of conducting a financial ratio analysis in the context of an internal audit?

    <p>To analyze the firm's internal economic condition</p> Signup and view all the answers

    What is a key component of customer analysis?

    <p>Evaluating market positioning strategies</p> Signup and view all the answers

    Which of the following stakeholders primarily influences pricing decisions?

    <p>Consumers</p> Signup and view all the answers

    What is the main focus of marketing research?

    <p>Data analysis related to marketing problems</p> Signup and view all the answers

    What does product and service planning not typically include?

    <p>Consumer surveys</p> Signup and view all the answers

    Which step is not part of the cost/benefit analysis process?

    <p>Define customer segmentation</p> Signup and view all the answers

    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.
    • 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.
    • Process:
      1. Calculate total costs.
      2. Estimate total benefits.
      3. Compare total costs with total benefits.

    Finance/Accounting Functions

    • 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.
    • Steps:
      1. List key internal factors identified during the internal audit.
      2. Assign weights from 0.0 (not important) to 1.0 (most important).
      3. Assign ratings from 1 (major weakness) to 4 (major strength).
      4. Multiply each factor's weight by its rating to get a weighted score.
      5. Sum the weighted scores for each variable to get the total weighted score.
    • 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.

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