Uneak White's Personal Brand Exploration Presentation
Internal Environmental Analysis
1. BPMN 6023 STRATEGIC MANAGEMENT
LOGO
Internal Environmental Analysis
Prepared for : Prof Dr Ajay Chauhan
Prepared by : 1. Logeswari d/o Uthama Puthran 808844
2. Mohd Faiz bin Zalwi @ Alwi 808856
2. Contents
Internal scanning: Organization analysis
Resource-based View
Business Model
Value-Chain Analysis
Scanning Functional Resources
Scanning Functional Resources and Capabilities
The Strategic Audit: A Checklist for Organization analysis
Synthesis of Internal Factors
3. Introduction
What is an Internal Analysis?
Internal Analysis
Identifies and evaluates resources, capabilities, and core
competencies
Looks at the organization’s
oCurrent vision
oMission
oStrategic objectives
oStrategies
Why Do an Internal Analysis?
It is the only way to identify an organization’s strengths and
weaknesses
It’s needed for making good strategic decisions
4. INTERNAL SCANNING:
ORGANIZATION ANALYSIS
Internal • Critical strength and
weaknesses to determine if
strategic firm able to take advantage of
factors opportunities and avoid threats
• Concerned with identifying and
Organizational
developing an organization’s
analysis resources and competencies
5. RESOURCE-BASED VIEW
Resources Capabilities
•Asset (tangible and intangible), •A corporation ability to exploit its
competency, process, skill or resources
knowledge controlled by the
corporation
7. RESOURCE-BASED VIEW
Barney, VRIO framework
Value Rareness Imitability Organization
• Does it • Do other • Is it costly • Is the firm
provide competitors for other to organized
competitive posses it? imitate? to exploit
advantage? the
resource?
8. RESOURCE-BASED VIEW
Using resources to gain competitive
advantage
Identify and classify resources in terms of
strengths and weaknesses
Combine the firm’s strengths into specific
capabilities and core competencies
Appraise profit potential- Are there any
distinctive competencies?
Select the strategy that best exploits the
firm’s capabilities and competencies relative
to external opportunities
Identify resource gaps and invest in
upgrading weaknesses
9. RESOURCE-BASED VIEW
Determine the sustainability of an
advantage
Durability Imitability
• The rate at which a • The rate at which a
firm’s underlying firm’s underlying
resources, capabilities, resources, capabilities,
or core competencies or core competencies
depreciate or become can be duplicated by
obsolete others
• Eg: Air Asia - Low
cost airline in Asia
10. RESOURCE-BASED VIEW
Imitability Determined By
Transparency Transferability Replicability
The speed at which The ability of competitors The ability of competitors
other firms under the to gather the resources to use duplicated
relationship of resources and capabilities resources and
and capabilities support necessary to support a capabilities to imitate the
a successful strategy competitive challenge other firm’s success
Eg: Gillette’s Sensor Eg: French Winery’s key Eg: Procter & Gamble’s
razor design resources coordination mechanism
11. RESOURCE-BASED VIEW
Explicit knowledge- knowledge that can be easily articulated and
communicated
Tacit knowledge- knowledge that is not easily communicated
because it is deeply rooted in employee experience or in the
company’s culture
12. BUSINESS MODEL
Business model
Company method for
making money in
current business
It includes key
structural and
operational
characteristics of a firm
– how it earns revenue
and makes profit
13. VALUE-CHAIN ANALYSIS
Value chain- a linked set of value creating activities
that begin with basic raw materials coming from
suppliers, moving on to a series of value-added
activities involved in producing and marking a
product or service, and ending with distributors
getting the final goods into the hands of the
ultimate consumer
Raw Primary Product
Fabricat-
materia- manufa- procedu- Retailer
ion
ls cturing res
15. VALUE-CHAIN ANALYSIS
Corporate Value Chain Analysis
Examine each product line’s value chain in terms of the
various activities involved in producing the product or service
Examine the linkages within each product line’s value chain
Examine the potential synergies among the value chains of
different product lines or business units
16. SCANNING FUNCTIONAL
RESOURCES
Basic Organizational Structures
STRATEGIC CONGLOMER-
SIMPLE BUSINESS ATE
UNITS
FUNCTIONAL DIVISIONAL (USBS)
Small or Large
entrepreneur- corporation /
Medium-sized Large Division or
dominated holding
firm corporation group of
company company
division
Product line in Many product composed of
One or two independent Product line in
one industry line in several
product line product several
operates industry market unrelated
segmant industry
Eg: KFC Eg:
18. SCANNING FUNCTIONAL
RESOURCES
Corporate Culture: Attributes
Cultural intensity Cultural integration
The degree of The extent of
which members of which units
a unit accept the throughout the
norms, values and organization share
other cultural a common culture.
content associated • Shows the breadth of
with the unit. the culture
• Eg: Arm force
• Shows the depth of the
culture
• Eg: Air Asia
19. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
MANAGEMENT
STRATEGIC MARKETING ISSUES
STRATEGIC FINANCIAL ISSUES
STRATEGIC RESEARCH AND DEVELOPMENT
(R & D) ISSUES
STRATEGIC OPERATION ISSUES
STRATEGIC HUMAN RESOURCES ISSUES
20. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
MANAGEMENT
Management is a process of coordinating activities,
which comprises of five functions:
PLANNING
1
ORGANIZING 2 3 MOTIVATING
MANAGEMENT
STAFFING 4 3 CONTROLLING
21. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC MARKETING ISSUE
1. Market Position and Segmentation -
“Who are our Customer?” – in terms of market, product,
and geographic locations.
2. Marketing Mix – refers to the particular
combination of key variables (product, place, promotion
and price); to affect demand & to gain competitive
advantage
3. Product Life Cycle -is a graph showing time
plotted against the monetary sales of a product as it
moves from introduction through growth and maturity
and to decline.
4. Brand and Corporate Reputation – A
Brand is a name given to a company’s product which
identifies that item in the mind of the consumer.
22. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC MARKETING ISSUE
1. Market Position and Segmentation - “Who are our Customer?” –
in terms of market, product, and geographic locations. To
discover what niches to seek, which new types of products to
develop,
23. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC MARKETING ISSUE
2. Marketing Mix – refers to the particular combination
of key variables ( 4P’s :Product, Place, Promotion and Price);
under a corporation’s control that can be used to affect demand
& to gain competitive advantage.
24. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC MARKETING ISSUE
1. Product Life Cycle -is a graph showing time plotted against the
monetary sales of a product as it moves from introduction through growth
and maturity and to decline.
25. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC MARKETING ISSUE
1. Brand and Corporate Reputation
– A Brand is a name given to a company’s product which
identifies that item in the mind of the consumer.
- Over time and with proper advertising, a brand connotes
various characteristics in the consumer’ mind.
- For example, Disney stands for family entertainment,
BMW means high-performance autos
- A Corporate Reputation is a widely held perception of a
company by the general public. It consists of two
attributes:
1) Stakeholders’ perception of a corporation’s ability to
produce quality goods and;
2) A Corporation’s prominence in the minds of stakeholders.
A good corporate reputation can be a strategic resources.
26. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
To Identify a Company’s Strengths and Weaknesses from the
financial perspective.
1. Financial Leverage
The concept of financial leverage (the ratio of total debt to
total assets) is helpful in describing how debt is used to
increase the earnings available to common shareholders.
2. Capital Budgeting
Capital Budgeting is the analyzing and ranking of possible
investments in fixed assets such as land, buildings, and
equipment in terms of the additional outlays and additional
receipts that will result from each investment.
*Hurdle point
27. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
To Identify a Company’s Strengths and Weaknesses from the
financial perspective.
Question concerning the financial position of the company, it’s
stability and competitiveness could only be answered after a
thorough and detailed financial analysis.
Adequate capital is the basic foundation to run any business. It is
essential to control cash flow within the organization to ensure
conformity with its intended use
Budgeting plays important role to ensure that all allocation of cash
is appropriately distributed.
Determining of financial strengths and weakness is important for
effective strategy formulation activities and to compliment other
departments within the company such as the operation,
management and marketing division.
28. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
1. Financial Ratios
The five main ratios is used in evaluating the
company’s financial positions;
1. Liquidity Ratios
2. Leverage Ratios
3. Activity Ratios
4. Profitability Ratios
5. Growths Ratios
29. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
1. Financial Ratios
Liquidity ratios measure a firm’s ability to
meet its current financial obligations.
Liquidity Ratios include:
Net working capital
Current Ratio
Quick Ratio
30. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Net Working Capital
While not technically a ratio, Net Working Capital (NWC) is a key element for
internal control.
The higher this number the better.
NWC is found by subtracting current liabilities from current assets.
This is a sign of growing assets while keeping their liabilities stable.
31. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Current Ratio
The Current Ratio is a direct evaluation of a
company’s liquidity.
The higher this value, the more liquid a firm’s
resources are.
Current Ratio is found by dividing current
assets by current liabilities.
This could be improved by lowering the
reliance on debt financing.
32. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Quick Ratio
The Quick Ratio is comparable to the Current
Ratio except that it takes inventory levels
into consideration.
This is found by subtracting inventories from
current assets and then dividing by current
assets.
33. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Activity Ratio Analysis
Activity Ratios are used to measure the speed
with which accounts are converted into cash.
Activity Ratios include:
Inventory Turnover
Average Collection Period
Total Asset Turnover
34. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Inventory Turnover
Inventory Turnover is measurement of a firm’s
inventory liquidity.
This is found by cost of goods sold(COGS) by
inventory.
Generally a lower number is better.
35. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Total Asset Turnover
Total Asset Turnover illustrates the firm’s ability and
proficiency in using its assets to generated sales.
It is found by dividing sales by total assets, and is
measured in times per year
When using cross-sectional analysis, a company must
take special care in comparing Total Asset Turnover
because new assets tend to have lower turnover.
36. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Debt Ratio Analysis
A company’s debt position is a measure of how much of the
firm’s profits are generated using money borrowed from
other companies or individuals.
Debt Ratios include:
Financial Leverage Multiplier
Debt Ratio
Interest Coverage Ratio
37. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Financial Leverage Multiplier
The Financial Leverage Multiplier (FLM) is used to
convert the company’s Return On Assets to its Return
on Equity. This reflects the impact of leverage, or use
of debt, on owners’ return.
It is the ratio of total assets to stockholders’ equity.
38. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Profitability Ratio Analysis
Profitability Ratios evaluate a company’s
earnings with respect to sales, assets,
owner’s investments and share values.
Profitability Ratios include
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Total Assets
Return on Equity
39. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Gross Profit Margin
The Gross Profit Margin(GPR) is the
percentage of each sales dollar that remains
after the firm has paid for the goods sold.
It is found by subtracting COGS from sales
and dividing by sales.
40. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Net Profit Margin
Net Profit Margin(NPR), one of the most
popular indicators of company health, measures
the percentage of sales revenue remaining after
ALL expenses are paid.
NPR is found by dividing net profits by sales
41. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Return on Total Assets
Return of Total Assets(ROA), also known as return on
investment, measures a firm’s effectiveness at
generating profits with its assets.
ROA is found by dividing the net profits after taxes by
total assets.
42. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC FINANCIAL ISSUES
Return on Equity
The Return on Equity(ROE) is extremely important to
potential investors.
ROE is found by dividing net profit by owner’s equity.
46. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC RESEARCH AND DEVELOPMENT (R & D)
ISSUES
1. R & D Intensity, Technological Competence, and
Technology Transfer -The Company must make available
the resources necessary for effective research and development.
A Company’s R & D intensity is a principal means of gaining
market share in global competition. The amount spent on R & D
often varies by industry.
2. R & D Mix - Basic R & D is conducted by scientists in well-
equipped laboratories where the focus is on the theoretical
problem areas. Product R & D- concentrates on marketing and is
concerned with product or product packaging improvements
3. Engineering R & D - concerned with engineering,
concentrating on quality control, and the development of design
specifications and improved production equipment
47. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC RESEARCH AND DEVELOPMENT (R & D) ISSUES
Impact of Technological of Discontinuity on Strategy
In the corporate planning process, it is generally assumed that incremental progress in
technology will occur. But pass developments in a given technology cannot be extrapolated
into the future because every technology has its limits. The key to competitiveness is to
determine when to shift resources to a technology that has more potential.
48. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC OPERATION ISSUES
1. Experience Curve - unit production costs
decline by some fixed percentage each time the
total accumulated volume of production units
doubles
2. Flexible Manufacturing for Mass
Customization – The use of Computer-
Assisted Design and Computer-Assisted
Manufacturing (CAD/CAM) and robot technology
means that learning time is shorter and products
can be manufactured in small, customized batches
in a process call mass customization – the low cost
production of individually customized goods and
services.
49. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC OPERATION ISSUES
BUSINESS PROCESS AND OPERATION
AirAsia has fostered a dependency on Internet technology for its operational
and strategic management, and provides an online ticket booking services to
traveler online. The following shows the home page of AirAsia.com as the
company key channel of marketing and sales.
51. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM)
ISSUES
1. Increasing Use of Teams
2. Union Relations and temporary/Part-
Time Workers
3. Quality of Work Life and Human Diversity
4. Impact on Performance
5. Supply Chain Management
52. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM) ISSUES
1. Increasing Use of Teams
Teams
Autonomous (self-managed)- a group of people
working together without a supervisor to plan,
coordinate and evaluate their work
Cross-functional work teams- various disciplines are
involved in a project from the beginning
Concurrent engineering- specialists work side-by-
side and compare notes constantly to design
cost-effective products with features customers
want
53. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM) ISSUES
1. Increasing Use of Teams
Virtual Teams - groups of geographically or
organizationally dispersed coworkers that
are assembled using a combination of
telecommunications and information
technologies to accomplish organizational
tasks.
54. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM) ISSUES
2. Union Relations and temporary/Part-Time Workers - If the
corporation is unionized, a good human resource manager should be able
to work closely with the union. To save jobs, Unions are increasingly
willing to support new strategic initiatives and employee involvement. To
increase flexibility, avoid layoffs, and reduce labor costs, corporations
are using more temporary (also known as contingent) workers.
3. Quality of Work Life and Human Diversity -Human Resource
departments have found that to reduce employee dissatisfaction and
unionization efforts (or, conversely, to improve employee satisfaction
and existing union relations), they must consider the quality of work life
in the design of jobs. To Improve the corporation’s quality of work life by
(1) Introducing participative problem solving
(2) Restructuring Work,
(3) Introducing innovative reward systems, and
(4) improving the work environment
Human Diversity refers to the mix in the workplace of people from
different races, cultures, and backgrounds.
55. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM) ISSUES
4. Impact on Performance – A current trend in corporate
information systems/ technology is the increasing use of the
internet for marketing, intranets for internal communication,
and extranets for logistics and distribution.
INTRANET – is an information network within an organization
that also has access to the external worldwide Internet.
EXTRANET – is an information network within an organization
that is available to key suppliers and customers.
5. Supply Chain Management - is the forming of
networks for sourcing raw materials, manufacturing products
or creating services, storing and distributing the goods, and
delivering them to customers and consumers.
56. SCANNING FUNCTIONAL RESOURCES AND
CAPABILITIES
STRATEGIC HUMAN RESOURCE (HRM) ISSUES
Evaluate people and partners in AirAsia
The AirAsia Team have highly competitive and attractive compensation
packages.
In order to provide customer excellent service, AirAsia arrange a series
of training course to their in-house flight attendant. The training
courses include awareness on safety standards, aviation terminology, in
flight service procedures, product knowledge and so on.
AirAsia chose many kinds of field partners as their complementors.
Their partnership can divide into two main kinds: direct partners and
indirect partners.
Direct partners have strong relationship with the airline, for
example, hotels, travel agencies and so on. And indirect partner
included Facebook, Twitter Koolred and Youtube.
AirAsia is company which rely on Internet a lot so with those
communities, AirAsia can build strong connection with their customers
57. THE STRATEGIC AUDIT : A CHECKLIST FOR
ORGANIZATIONAL ANALYSIS
STRENGTHS AND WEAKNESSES (SWOT)
– When all the factors related with internal
analysis ascertained (management,
marketing, financial and
operation/production), the organisation is
then able to see its position more clearly. In
addition, the company’s strengths and
weakness can also be identified.
58. THE STRATEGIC AUDIT : A CHECKLIST FOR
ORGANIZATIONAL ANALYSIS
AirAsia SWOT Analysis
Strengths
• Low cost operations
• Fewer management level, effective, focused and aggressive management
• Simple proven business model that consistently delivers that lowest fares
• Penetrate and stimulate to potential markets
• Multi-skilled staffs means efficient and incentive workforce
• Single type fleet minimize maintenance fee and easy for pilot dispatch
Weaknesses
• Service resource is limited by lower costs
• Limited human resources could not handle irregular situation
• Government interference and regulation on airport deals and passenger
compensation
• Non-central location of secondary airports
• Brand is vital for market position and developing it is always a challenge
• Heavy reliance on outsourcing
• New entrants to provide the price-sensitive services
www.themegallery.com Company Logo
61. INTERNAL STRATEGIC
FACTORS
Strength Weakness
Low cost carrier Service resource is limited by
lower costs
First mover advantage (first Limited human resources
low cost airline in Asia)
More seats per aircraft Regulation on airport
Single type fleet minimize Complaints from customers
maintenance fee (flight delays)
Reduced staff numbers
Brand name
62. RESOURCES, CAPABILITIES,
COMPETENCIES
Resources Constructive and supportive management
Highly skilled employees
Capabilities to reduce cost
Capabilities Quick turnaround time
Low-cost short haul
High rate aircraft utilization
Competencies The strategic decision in using one type of
aircraft
The synergy between AA management and its
employees
The capabilities themselves