Internal Analysis: Anjali Singh

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Internal Analysis

Anjali Singh
Internal Analysis
• Process of identification of strengths and
weaknesses
• Helps identify resources and capabilities
• Resource Based View (RBV)
– Perspective of identifying and analyzing firm
level resources that contribute to its
competitive success
RBV- Assessment Test
• Scarcity Test
• Mobility Test
• Inimitability Test
– Branding, patent and first mover advantage
– Path dependency
– Causal ambiguity
– Scale deterrence
• Durability Test
• Appropriability Test
• Substitutability and superiority test
Strategic Advantage
Strategic advantage

Organizational Capability

Competencies

Synergistic effects

Strengths and weakness

Organizational resources + organizational behavior


Organizational Capability
• Financial Capability
• Marketing Capability
• Operations Capability
• Personnel Capability
• Information management capability
• General Management capability
Financial Capability
• Factors related to source of funds
• Factors related to use of funds
• Factors related to management of funds
• Strengths :-
– Access to financial resources
– Relationship with financial institutions
– Credit worthiness
– Efficient capital budgeting
– Low cost of capital
– Tax benefits
– Management control systems
Marketing capability
• Product factors
• Price- related factors
• place related factors
• Promotion related factors
• Strengths
– Range & quality of products
– Focused positioning
– Lower prices / price protection
– Effective sales promotion & advertising
– Company & brand image
Operational Capability
• Factors relating to
– Production system
– Operations & control system
– Related to R & D system
• Strengths
– High capacity utilization
– Favorable plant location
– Vertical integration / integrated supply
– Control of operational costs
– Technical collaboration / R & D personnel
Personnel Capability
• Factors relating to
– Personnel system
– Organizational & employee characteristics
– Industrial relations
• Strengths
– Genuine concern for people
– Efficient personnel system
– Fair employer
– Training & development opportunities
– Working environment
– Motivated workforce – low absenteeism & high loyalty
Internal Appraisal
• Factors that affect internal appraisal
– Ability of strategists to comprehend the
different forces operating within the internal
environment
– Size
– Internal atmosphere
Methods and techniques
• Internal analysis
– Value chain
– Quantitative analysis
• Comparative analysis
– Historical analysis
– Industry norms
– Benchmarking
• Comprehensive analysis
– Balance scorecard
– Key factor rating

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