1 bruce bowhill university of portsmouth isbn: 978-0-470-06177-0 © 2008 john wiley & sons ltd

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1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470- 06177-0 © 2008 John Wiley & Sons Ltd. www.wileyeurope.com/college/bowhill

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Page 1: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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Bruce Bowhill

University of Portsmouth

ISBN: 978-0-470-06177-0

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 2: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

Chapter 15

Internal Appraisal of the Organisation

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 3: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Market analysis and appraisal of products and services

• Achieving competitive advantage through:– Identifying the attributes that add value for customers– Strategic positioning of the organisation

• Identifying the sources of competitive advantage– Undertaking a resource audit– Identifying organisational competencies – value chain

analysis

• Benchmarking

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 4: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Market analysis and appraisal of products and services– 1) The product life cycle

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 5: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Implications of the product life cycle– Cash flows– Profits– Strategy

• Build• Hold• Harvest

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 6: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• 2) Monitoring competitive position – product portfolio analysis

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 7: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Strategic implications of the BCG matrix– It is likely to be desirable to have a balanced portfolio.

For example, too many ‘questions marks’ (usually early stage of the life cycle) could lead to a cash flow problem.

– Build, hold or harvest strategies.

• Problems of the BCG matrix– High or low market share?– Dangers of prescriptive use of the matrix– Limited number of factors considered– Market segment that is chosen

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 8: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Achieving competitive advantage1) Identifying the attributes that customers value

• Product/ service attributes– Functionality– Quality– Price – Time

• Customer relationships• Image

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 9: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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2) Achieving competitive advantage through strategic positioning– generic strategies (Porter)

• Cost leadership - price• Differentiation – unique dimension that can

command a premium price• Focus

- Confrontation strategy

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 10: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Sources of competitive advantage

• 1) Resource audit – Financial performance and funds– Physical– Human resources– Intangible assets

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 11: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• 2) Competencies of the organisation

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 12: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Cost drivers– All activities add cost. Eliminate activities that

do not add value and reduce expenditure where little value is added.

• Value drivers– Actions that lead to the provision of features

that add value such as on-time delivery, product quality or durability.

• Identify linkages between activities – Linkages between the activities of an

organisation– Supplier and customer linkages

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 13: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Comparative analysis– Competitive benchmarking– Functional or generic benchmarking– Internal benchmarking

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill

Page 14: 1 Bruce Bowhill University of Portsmouth ISBN: 978-0-470-06177-0 © 2008 John Wiley & Sons Ltd

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• Competitive benchmarking

© 2008 John Wiley & Sons Ltd.www.wileyeurope.com/college/bowhill