Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis

CHAPTER 4 ASSESSING STRENGTHS AND

WEAKNESSES: DOING AN INTERNAL ANALYSIS
LEARNING OUTCOMES
Use this Learning Outline as you read and study this chapter:
4.1 Describe a i!era" aa"#sis.
4.$ E%&"ai '() !( *( a i!era" aa"#sis.
4.+ Disc,ss )'# a i!era" aa"#sis is i-&(r!a!.
TE.T OUTLINE
Ac!i/e Leari0 Hi!
Before beginning an internal analysis, ask the class to briefly explain an external analysis! "his re#ie$
co%ld be first cond%cted in st%dent pairs $ith each pair then &oining $ith another st%dent pair to
co'pare notes Be certain to clarify that internal analysis identifies an organi(ation)s strengths and
$eaknesses, and external analysis identifies the en#iron'ent)s opport%nities and threats to co'plete a
sit%ation *ie, SW+", analysis
Strategic Management in Action Case #1: Making Over Avon
A#on is the $orld)s top direct seller of cos'etics and bea%ty-related ite's .#en $ith a global
econo'ic recession, the co'pany increased the n%'ber of independent sales representati#es by /01
"his increase $as especially seen in 2%ssia and China 3 t$o 'arkets $ith an e'erging 'iddle class
4o$e#er, prices for ra$ 'aterials ha#e h%rt A#on as the fir' 'an%fact%res and packages nearly all of
its bea%ty prod%cts As these costs rose, profits $ere affected A#on)s C.+, Andrea 5%ng, arri#ed in
/666 and 'ade se#eral 'a&or c%ts and layoffs thro%gho%t the co'pany *except for ad#ertising and
pro'otion, In addition, a fe$ significant 'issteps in Bra(il and .%rope kept the co'pany fro' f%lly
reco#ering As A#on contin%es to look for a ne$ C.+, 5%ng re'ains in place And once the ne$ C.+
is fo%nd, she $ill re'ain as .xec%ti#e Chair'an for the co'pany
So'e 7%estions for st%dents to consider are:
What $ent $rong $ith A#on8 What $ent right8
Is the independent sales representati#e still the 'ost appropriate 'eans for distrib%tion for this
co'pany8
What do yo% think abo%t the leadership changes8 Sho%ld 5%ng co'pletely re'o#e herself fro'
the co'pany8
"eaching 9otes:
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
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I LEARNING OUTCOME 4.1
DESCRI1E AN INTERNAL ANALYSIS
An i!era" aa"#sis is the process of e#al%ating an organi(ation?s reso%rces and capabilities It
pro#ides infor'ation abo%t an organi(ation)s assets, reso%rces and capabilities and e#al%ates the
organi(ation)s reso%rces, capabilities and core co'petencies
A A Quick Review of Organizational Resources
/ "he assets an organi(ation has for carrying o%t $hate#er $ork acti#ities and processes it?s in
b%siness to do "hese reso%rces *or assets, can be:
a, Financial resources incl%de debt capacity, credit lines, a#ailable e7%ity *stock,, cash
reser#es, and any other financial *'onetary, assets
b, Physical assets incl%de tangible assets s%ch as b%ildings, e7%ip'ent and fixt%res, ra$
'aterials, office s%pplies, 'an%fact%ring facilities, 'achines and so forth
c, Human resources incl%de the experiences, kno$ledge, &%dg'ent, skills, acc%'%lated
$isdo', and co'petencies of the organi(ation?s e'ployees
d, Intangible resources are s%ch things as brand na'es, patents, trade'arks, databases,
copyrights, or registered designs
e, Structural-cultural resources incl%de s%ch things as organi(ational history, c%lt%re,
$ork syste's, policies, relationships and the for'al reporting *organi(ational, str%ct%re
being %sed
0 An organi(ation?s tangible and intangible reso%rces can be a so%rce of co'petiti#e
ad#antage 4o$e#er, reso%rces play a 'ore i'portant role in deter'ining an organi(ation?s
capabilities and core co'petencies *See @ig%re 40,
B From Resources to Organizational Capailities
+rgani(ational reso%rces '%st be processed or %sed in so'e $ay to get the #al%e o%t of the'
"he #ario%s reso%rces are the inp%ts for organi(ational capabilities
/ Or0ai2a!i(a" ca&abi"i!ies can be defined as the net$ork of organi(ational ro%tines and
processes that deter'ine ho$ efficiently and effecti#ely the organi(ation transfor's its
inp%ts *reso%rces, into o%tp%ts *prod%cts incl%ding physical goods and ser#ices,
0 Or0ai2a!i(a" r(,!ies a* &r(cesses are the reg%lar, predictable, and se7%ential patterns
of $ork acti#ities perfor'ed by organi(ational 'e'bers
S!ra!e0ic Maa0e-e! i Ac!i(: H((/er3s Ic.
What resources and capabilities might be needed for such a transition from a paper-based
information company to an Internet-based information company
"he target 'arkets for 'any prod%cts and ser#ices a#ailable on the Web are other b%sinesses, not
cons%'er end %sers 4oo#er)s pro#ides ti'ely infor'ation #ia the Internet on the history and
credit-$orthiness of other b%sinesses 4a#e the st%dents #isit the 4oo#er)s A$$$hoo#ersco'B
Web site before the class disc%ssion Altho%gh responses are likely to #ary significantly, the
exercise sho%ld highlight the ti'eliness! of infor'ation In the ti'e of paper-based infor'ation,
infor'ation that $as a $eek or e#en a calendar 7%arter old 'ay ha#e been acceptable to 4oo#er)s
c%sto'ers With Internet access, c%sto'er expectations are for i''ediate deli#ery of #ery
acc%rate and c%rrent infor'ation 4oo#er)s data $ill likely be %sed for 'ore p%rposes beca%se it is
'ore readily a#ailable, opening %p the organi(ation to 'ore liability if the pro#ided infor'ation is
inacc%rate 4oo#er)s is also able to cross-sell additional ser#ices thro%gh its con#enient Web site
*ie, c%sto' research, data 'ining,
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
= Capabilities in#ol#e co'plex patterns of coordination bet$een people and bet$een other
organi(ational reso%rces and people
4 Sustainable co'petiti#e ad#antage is the prolonged 'aintenance of co'petiti#e ad#antageC
capabilities that are capable of leading to a co'petiti#e ad#antage today 'ay not contin%e
to do so as conditions and co'petitors change
D D#a-ic ca&abi"i!ies are an organi(ation)s ability to b%ild, integrate and reconfig%re
capabilities to address rapidly changing en#iron'ents
C From Capailities to Core Competencies an! "istinctive Capailities
/ C(re c(-&e!ecies are an organi(ation?s 'a&or #al%e-creating capabilities that are essential
to their b%siness *2efer back to @ig%re 40,
a, +rgani(ational capabilities are the f%nda'ental b%ilding blocks for de#eloping core
co'petencies
b, Core co'petencies are created o%t of ro%tines and processed, acc%'%lated kno$ledge
and act%al $ork acti#ities If core co'petencies are established, and not e#ery
organi(ation is able to do so, they can, in t%rn, i'pro#e and enhance other
organi(ational capabilities and contrib%te to de#eloping distincti#e capabilities, $hich is
$hat leads to a co'petiti#e ad#antage
0 Dis!ic!i/e (r0ai2a!i(a" ca&abi"i!ies are the special and %ni7%e capabilities that
disting%ish the organi(ation fro' its co'petitors Distincti#e organi(ational capabilities
allo$ the organi(ation to de#elop a s%stainable co'petiti#e ad#antage and o%tperfor' its
co'petition *2efer back to @ig%re 40,
A9+".: Se/era" s"i*es are e%cer&!s (4 5i0,re 4.$ that co#er distincti#e organi(ational
capabilities, core co'petencies and organi(ational capabilitiesB
a, Distincti#e capabilities ha#e three characteristics *see @ig%re 4=,:
*/, Contrib%tes to s%perior c%sto'er #al%e and offers real benefits to c%sto'ers
*0, Diffic%lt for co'petitors to i'itate
*=, Allo$ the organi(ation to %se the capability in a #ariety of $ays
S!ra!e0ic Maa0e-e! i Ac!i(: 65 C(r&(ra!i(
E@ Corporation)s capabilities of state-of-the-art distrib%tion, global b%ying po$er and keen
'erchandising instincts $ere %sed to con#ert lang%ishing fashion brands to $inners
Which characteristics of distincti!e capabilities does this illustrate
"he characteristics that E@ Corporation sho$s are: contrib%tes to s%perior c%sto'er #al%e and
offers real benefits to c%sto'ersC diffic%lt for co'petitors to i'itateC allo$s the organi(ation to %se
the capability in a #ariety of $ays
= 2elationship bet$een organi(ational capabilities, distincti#e organi(ational capabilities and
core co'petencies:
a, +rgani(ational capabilities co'e firstFthey?re the f%nda'ental b%ilding block for
de#eloping core co'petencies .#ery organi(ation has organi(ational processes and
ro%tines to get $ork done *2efer back to @ig%re 40,
4 Co'petiti#e Ad#antage and >erfor'ance 2es%lts
a, Co'petiti#e ad#antage is $hat sets an organi(ation apartFits co'petiti#e edge G%st
co'e fro' an organi(ation)s %ni7%e reso%rces or its distincti#e capabilities
b, Altho%gh it?s possible for an organi(ation to en&oy strong perfor'ance res%lts in the
short r%n $itho%t a s%stainable co'petiti#e ad#antage, long-r%n s%ccess and s%r#i#al
are %ncertain I'portant that organi(ational decision 'akers kno$ $here the
organi(ation)s strengths and $eaknesses are in ter's of its reso%rces, capabilities and
co'petencies
D #$e Role of Strengt$s an! %eaknesses
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
"he $hole reason for doing an internal analysis is to assess $hat the organi(ation has or doesn?t
ha#e *ie, reso%rces, and $hat it can and can?t do *ie, capabilities,Fin other $ords, its
strengths and its $eaknesses
/ S!re0!'s are reso%rces that the organi(ation possesses and capabilities that the
organi(ation has de#eloped, both of $hich can be exploited and de#eloped into a
s%stainable co'petiti#e ad#antage
a, 9ot e#ery strength has the potential to be a s%stainable co'petiti#e ad#antage
b, Strengths sho%ld be n%rt%red and reinforced as its 'ain co'petiti#e $eapons
0 Wea7esses are reso%rces and capabilities that are lacking or deficient and pre#ent the
organi(ation fro' de#eloping a s%stainable co'petiti#e ad#antage
a, 9eed to be corrected if they?re in critical areas that are pre#enting the organi(ation fro'
de#eloping a s%stainable co'petiti#e ad#antage
b, D%e to b%dget constraints, 'anagers often choose to si'ply 'ini'i(e the i'pact of
$eaknesses if not in a critical area
A9+".: St%dents often conf%se so'e internal strengths and $eaknesses $ith external
opport%nities and threats It is i'portant at this point for st%dents to %nderstand that external
factors affect all co'petitors *ie, exchange rates, interest rates, and labor a#ailability,
4o$e#er, internal factors affect only the target organi(ation *ie, declining sales, losing
'oney, li'ited distrib%tion of the fir'?s prod%cts, etc, D%ring early SW+" exercises, $hen
st%dents identify a $eakness as external or a threat as internal, ask, HWhat $o%ld happen to this
ite' if the fir' $ent o%t of b%siness tonight8H "he ans$er, of co%rse, is that if the ite' is
internal, it $ill disappear and if it is external, it $ill re'ainB
Ac!i/e Leari0 Hi!
>a%se the lect%reC allo$ the st%dents t$o 'in%tes to co'pare notes $ith another st%dent to 'ake certain
each st%dent has the key concepts
"eaching 9otes:
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Leari0 Re/ie): Leari0 O,!c(-e 4.1
What is an internal analysis and ho" is it different from an e#ternal analysis
An internal analysis is the process of e#al%ating an organi(ation)s reso%rces and capabilities and
pro#ides i'portant infor'ation abo%t an organi(ation)s assets, skills and $ork acti#ities An internal
analysis is different fro' an external analysis as it looks at the organi(ation)s internal $orkings
$escribe the relationship bet"een resources% capabilities% and competiti!e ad!antage&
I 2eso%rces *assets, can be financial, physical, h%'an, intangible, and str%ct%ral-c%lt%ral When
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
an organi(ation?s capabilities contrib%te to c%sto'er #al%e that can be %sed in a #ariety of $ays
and are diffic%lt for co'petitors to i'itate, the capabilities beco'e Hdistincti#e organi(ational
capabilitiesH and a so%rce of s%stainable co'petiti#e ad#antage
What characteristics do distincti!e organi'ational capabilities ha!e
I $istincti!e organi'ational capabilities are the special and %ni7%e capabilities that disting%ish the
organi(ation fro' its co'petitors "hey allo$ the organi(ation to de#elop a s%stainable
co'petiti#e ad#antage and o%tperfor' its co'petition
- Contrib%tes to s%perior c%sto'er #al%e and offers real benefits to c%sto'ers
- Diffic%lt for co'petitors to i'itate
- Can be %sed in a #ariety of $ays
$efine strengths and "ea(nesses&
I Strengths are reso%rces that the organi(ation possesses and capabilities that the organi(ation has
de#eloped An organi(ation?s strengths 'ay be exploited and de#eloped into a s%stainable
co'petiti#e ad#antage
I Wea(nesses are reso%rces and capabilities that are lacking or deficient and that pre#ent the
organi(ation fro' de#eloping a s%stainable co'petiti#e ad#antage
II LEARNING OUTCOME 4.$
E.PLAIN HOW TO DO AN INTERNAL ANALYSIS
A &alue C$ain Anal'sis
C%sto'ers $ant *de'and, so'e type of #al%e fro' the goods and ser#ices they p%rchase or
obtain
/ C,s!(-er /a",e arises fro' three broad categories:
a, "he prod%ct is %ni7%e and different
b, "he prod%ct is lo$ priced
c, "he pro#iding organi(ation has the ability to respond to specific or distincti#e c%sto'er
needs 7%ickly and efficiently
0 6a",e c'ai aa"#sis8a syste'atic $ay of exa'ining all of the organi(ation?s f%nctional
acti#ities and ho$ $ell they create c%sto'er #al%e
S!ra!e0ic Maa0e-e! i Ac!i(: Har"e#9Da/i*s(
Ha!e the students offer opinions on "hether Harley-$a!idson is creating customer !alue by
selling beef )er(y&
a, Jni7%e and different8 "he fla#ors are %ni7%e *eg, teriyaki and pepper,
b, Ko$ priced8 9ot kno$n fro' the reading, altho%gh can ass%'e that $ill be pre'i%' priced
based on the 4arley-Da#idson brand
c, 2esponse to specific c%sto'er needs8 9ot kno$n fro' the reading, altho%gh the de'ographics
of both prod%cts are si'ilar
"his exercise 'ay assist st%dents in analy(ing $hether an organi(ation)s prod%ct or ser#ice creates
#al%e for the c%sto'er
= >orter identified nine areas of #al%e assess'ent, fi#e pri'ary acti#ities and fo%r s%pport
acti#ities Ganagers hope that the c%sto'er #al%e created by these acti#ities o%t$eighs the
cost of creating that #al%e It is not eno%gh &%st to kno$ $hat these acti#ities are, the
organi(ation?s decision 'akers '%st also %nderstand ho$ $ell the organi(ation is
perfor'ing these acti#ities
a, >ri'ary acti#ities are those that act%ally create c%sto'er #al%e
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
*/, Inbo%nd logistics
*0, +perations
*=, +%tbo%nd logistics
*4, Garketing and sales
*D, C%sto'er ser#ice
A9+".: 2e#ie$ "able 4/ sho%ld ill%strate the %nderlying basis of #al%e chain analysis It
'ay pro#e helpf%l for st%dents $orking in gro%ps to address these 7%estions by identifying
$hat so%rces of data sho%ld be a#ailable to the organi(ation?s decision 'akersB
b, S%pport acti#ities pro#ide s%pport for the pri'ary acti#ities as $ell as for each other
A9+".: Another in-class gro%p exercise si'ilar to the one abo#e, b%t %sing "able 40,
sho%ld help ill%strate the role of s%pport acti#ities in a #al%e chain analysisB
c, "o the extent that the organi(ation perfor's any of these acti#ities 'ore effecti#ely or
efficiently than its co'petitors, it sho%ld be able to achie#e a co'petiti#e ad#antage
*/, "he ad#antage of the #al%e chain analysis techni7%e is that it e'phasi(es the
i'portance of c%sto'er #al%e and ho$ $ell an organi(ation perfor's the pri'ary
and s%pport acti#ities to create c%sto'er #al%e
*0, "his techni7%e 'ay be so'e$hat conf%sing and co'plex to %se in assessing
organi(ational strengths and $eaknesses beca%se organi(ational $ork acti#ities
don?t al$ays fit neatly into the pri'ary and s%pport acti#ities fra'e$ork
B (sing an )nternal Au!it
"he internal a%dit approach starts $ith the pre'ise that e#ery organi(ation has certain f%nctions
that it '%st perfor'
/ I!era" a,*i! is a thoro%gh assess'ent of an organi(ation?s #ario%s internal f%nctional
areas
a, Strategic decision 'akers %se the internal a%dit to assess the organi(ation?s reso%rces
and capabilities fro' the perspecti#e of its different f%nctions
b, Are the necessary reso%rces a#ailable so that people can perfor' their assigned $ork
acti#ities and ho$ $ell do they perfor' these $ork acti#ities *ie, $hat are their
capabilities,8
5(r Y(,r I4(r-a!i( : Or0ai2a!i(s Nee* P'#sica"s; T((
*ould the concept of a +physical e#am, be applied to organi'ations
"his reading pro#ides an analogy of a 'edical physical exa' to an internal a%dit
St%dents ne$ to strategy or b%siness 'ay find the analogy %sef%l in thinking abo%t a strategist)s &ob
of assessing organi(ations and the offering s%ggestions for i'pro#e'ent
0 Six pri'ary functional areas:
a, Productions-operationsFability to prod%ce prod%ct or deli#er ser#ice
b, -ar(etingFability to effecti#ely 'arket to prod%ctconsider the 4 >)s!
c, .esearch and de!elopmentFability to de#elop ne$ prod%ctLser#ice to 'aintain a
co'petiti#e ad#antage
d, Financial-accountingFe#al%ate fir')s financial stability and flexibility
e, -anagement% including H.-Fe#al%ate fir')s ability to 'anageL%se fir')s reso%rces
to effecti#elyLefficiently achie#e fir')s goals
f, Information systemsFability to gather and disse'inate infor'ation to 'ake
efficientLeffecti#e decisions
= Depending on prod%cts, 'arkets, and ind%stries, indi#id%al organi(ational str%ct%res 'ay
#ary and, therefore, 'ay e'phasi(e different sets of f%nctional areas
A9+".: 2e#ie$ing a fe$ of the 7%estions presented in "able 4= 'ay pro#e helpf%l for st%dents
in identifying so'e of the f%nctional areas and the corresponding concernsB
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
C Capailities Assessment *rofile
/ An in-depth e#al%ation of an organi(ation)s capabilities to deter'ine strengths and
$eaknesses
0 Analysis of capabilities is co'plex:
a, 9ot as easily deter'ined as organi(ational f%nctions or e#en the pri'ary and s%pport
acti#ities
b, Co'plex nat%re of capabilities 'akes it hard for co'petitors to i'itateFbasis for
s%stained co'petiti#e ad#antage
= Assess'ent consists of t$o phases:
a, >hase /FIdentifying distincti#e capabilities: an internal analysis acti#ity and the foc%s
of o%r disc%ssion for this co%rse
b, >hase 0FDe#eloping and le#eraging these distincti#e capabilities: a strategy
de#elop'ent acti#ity
4 Identifying distincti#e organi(ational capabilities *@ig%re 44,:
a, 2e#ie$ of characteristics of distincti#e capabilities
*/, Contrib%te to s%perior c%sto'er #al%e and offer c%sto'ers real #al%e
*0, Diffic%lt to i'itate
*=, Jsable in a #ariety of $ays by the organi(ation
b, Step One: >reparing a c%rrent prod%ct-'arket profile
*/, .'phasi(es organi(ation 3 c%sto'er interactions
*0, Identify $hat $e)re selling, $ho $e)re selling to, $hether or not $e)re pro#iding
s%perior c%sto'er #al%e or offering desirable benefits
*=, 9eed infor'ation abo%t specific prod%cts and 'arketsC principal co'petitors in
each of these prod%ct-'arket seg'entsC and perfor'ance 'eas%res for each
prod%ct-'arket seg'ent
c, Step /"o: Identifying so%rces of co'petiti#e ad#antage and disad#antage in the 'ain
prod%ct-'arket seg'ents
*/, Why c%sto'ers choose o%r prod%ct o#er co'petitors
*0, Infor'ation needed: specific cost, prod%ct and ser#ice attrib%tes
*=, When c%sto'ers p%rchase a prod%ct *a good or a ser#ice,, $hat they)re act%ally
p%rchasing is a b%ndle of attrib%tes that they belie#e $ill satisfy their needs
d, Step /hree: Describing all organi(ational capabilities and co'petencies
*/, .xa'ine reso%rces, skills and abilities of the organi(ation)s #ario%s di#isions
*0, Gost diffic%lt step, b%t yields 'ost infor'ation abo%t organi(ational operations
e, Step Four: Sorting these core capabilities and co'petencies according to their strategic
i'portance
*/, Does the capability pro#ide tangible c%sto'er benefits8
*0, Is the capability diffic%lt for co'petitors to i'itate8
*=, Can the capability pro#ide $ide access to a n%'ber of different 'arkets8
f, Step Fi!e: Identifying and agreeing on the key co'petencies and capabilities
S!ra!e0ic Maa0e-e! : T'e G"(ba" Pers&ec!i/e
What do the students thin( of Ubisoft0s approach What are the implications for the resources and
capabilities the company needs
Jbisoft)s offshoring approach li'its the reso%rces and capabilities the co'pany needs "his reading
sho%ld also generate a li#ely st%dent disc%ssion abo%t the pros and cons of o%tso%rcing and offshoring
"eaching 9otes:
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
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D "etermining an Organization+s Strengt$s an! %eaknesses *@ig%re 4D,
"he 'anager '%st analy(e the infor'ation gathered d%ring the internal analysis, regardless of
'ethod %sed, by co'paring it $ith gi#en criteria
/ Past Performance /rends
a, Any internal organi(ational perfor'ance area that)s 'eas%rable co%ld be assessed by
looking at the trends
b, "hese 7%antitati#e 'eas%res co%ld be organi(ational perfor'ance 'eas%res s%ch as
financial ratios, operations efficiency statistics, e'ployee prod%cti#ity statistics, or
7%ality control data
c, >erfor'ance trends can sho$ i'portant infor'ation abo%t the organi(ation)s %se of
reso%rces and capabilities, b%t it doesn)t indicate $hether or not perfor'ance is %p to
standards
0 Specific 1oals or /argets
Co'paring specific perfor'ance goals or targets $ith act%al perfor'ance "his assess'ent
pro#ides cl%es to ho$ $ell the #ario%s internal areas are perfor'ing
a, Or0ai2a!i(a" 0(a"s are state'ents of desired o%tco'es .#ery organi(ation sho%ld
ha#e specific goals at all le#els and in all internal f%nctional areas that state "hat it
hopes to acco'plish by "hen
b, "hese goals pro#ide direction by specifying $hat and ho$ organi(ational reso%rces and
capabilities are %sed in carrying o%t the organi(ational #ision and 'issions
5(r Y(,r I4(r-a!i( : Mar7e! S'are M#!'
$o the students agree "ith the premise that meeting customers0 changing needs !s& mar(et share is
ho" companies need to measure themsel!es against their competitors What are the implications
for doing an internal analysis 2re there customers an organi'ation might not "ant
@ir's 'ay still $ant high 'arket share b%t 'ay define 'arkets in 'ore narro$ ter's 4igh in#est'ent
'ay re7%ire 'ore 'arket share to spread o%t fixed costs Gore e'phasis on selling 'ore intensely,
'ore profitLc%sto'er
An internal analysis identifies $ays to be better for the 'ass 'arket *ie, efficiencies, cost, and for ne$
prod%cts and ser#ices for c%sto'ers $ho do not pay, de'and expensi#e s%pport, need special feat%res,
fail to %se the prod%ct safely *ie, liability iss%es,
= *omparison 2gainst *ompetitors
Co'pare perfor'ance $ith co'petitors to deter'ine $hether these strengths or $eaknesses
can be %sed to infl%ence the de#elop'ent of potential s%stainable co'petiti#e ad#antage
a, Deter'ine $hat and ho$ the organi(ation?s co'petitors are doing
b, So%rces of infor'ation:
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
*/, S%r#eys and rankings p%blished in external so%rces s%ch as Fortune and 3usiness
Wee(
*0, B%siness and general ne$s 'aga(ine articles
*=, Ann%al reports
*4, Sec%rities and .xchange Co''ission filings
*D, Ind%stry association ne$sletters
*M, 9et$orking at professional 'eetings, c%sto'er contacts
*N, Co'petitor?s $eb ho'e page
c, .thical considerations for gathering co'petiti#e intelligence *see Prey Qone,
Ac!i/e Leari0 Hi!
Debate the Prey Qone! iss%e $ith se#eral st%dent tea's of 4-D st%dents each Assign the position each
$ill represent Allo$ the gro%ps to de#elop arg%'ents to s%pport their positionC and then select t$o
st%dent tea's to debate the iss%e for the class Allo$ the tea's to phone a friend! *ie, cons%lt $ith
another gro%p if they need help to strengthen their position d%ring the debate,
T'e Gre# <(e
$o you thin( the information gathering methods are ethical or unethical What ethical
guidelines might you propose for strategic decision ma(ers "hen doing competitor
intelligence
$oes it matter if you thin( a competitor is using these tactics against your organi'ation $oes
that )ustify using the tactics% also
Petting infor'ation fro' p%blic so%rces c%sto'ers and e'ployees see' reasonable, b%t %sing
tricks, lies or stealing secrets crosses the line Agree8 +r disagree8
4 Personal 4or Sub)ecti!e5 Opinions of Strategic $ecision -a(ers or *onsultants
a, >ersonal opinion of those $ho are directly in#ol#ed in the acti#ity
b, R%alitati#e opinions or assess'ents of organi(ational 'e'bers can be %sef%l in
deter'ining areas of strength or $eakness
c, If o%tside cons%ltants are $orking $ith any of the organi(ation?s di#isions or %nits,
$hat?s their opinion8 What do they see as strengths or $eaknesses8
Leari0 Re/ie): Leari0 O,!c(-e 4.$
Ho" "ould the !alue chain approach to internal analysis be used
I A #al%e chain analysis helps deter'ine $hat c%sto'ers #al%e! in a prod%ct or ser#ice offering by
identifying $hat is i'portant in the c%sto'er?s #ie$
What does an organi'ational internal audit e!aluate
I An internal a%dit is a thoro%gh assess'ent of an organi(ation?s #ario%s internal f%nctional areas
"he process s%r#eys strengths and $eaknesses, categori(es these strengths and $eaknesses in
ter's of reso%rces and capabilities, in#estigates the potential of these strengths to lead to
co'petiti#e ad#antage, and e#al%ates the ability of these reso%rces and capabilities to ser#e as the
basis for an appropriate co'petiti#e strategy
Ho" do you )udge "hich organi'ational capabilities are strategically important
I 5%dging $hich capabilities are strategically i'portant is a 'atter of e#al%ating each one according
to three criteria: */, Can the capability pro#ide $ide access to a n%'ber of different 'arkets8
*0, Does the capability pro#ide tangible c%sto'er benefits8 and *=, Is the capability diffic%lt for
co'petitors to i'itate8
$escribe the criteria that can be used to )udge organi'ational resources and capabilities as either
strengths or "ea(nesses
I >ast perfor'ance trends criteria co%ld incl%de any organi(ational perfor'ance 'eas%res *eg,
financial ratios, operations efficiency statistics, e'ployee prod%cti#ity statistics, or data on
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
adherence to 7%ality control standards, Any internal organi(ational perfor'ance area that?s
'eas%rable co%ld be assessed by looking at the trends
I Specific goals or targets sho%ld be co'pared $ith act%al achie#e'ents
I Co'parison against co'petitors $ill let the organi(ation kno$ ho$ they stack %p against those
$ith $ho' they are co'peting for cons%'er dollars
I >ersonal opinions of strategic decision 'akers or cons%ltants are an i'portant so%rce of
7%alitati#e data,! as not all of the needed infor'ation can be capt%red by n%'bers
III LEARNING OUTCOME 4.+
DISCUSS WHY AN INTERNAL ANALYSIS IS IMPORTANT
A "$o basic reasons $hy doing an internal analysis is i'portant:
/ It?s the only $ay to identify an organi(ation?s strengths and $eaknesses
0 It?s needed for 'aking good strategic decisions
B Infor'ation de#eloped fro' an internal analysis co%pled $ith the infor'ation gathered fro' the
external analysis pro#ides the basis for s%stainable co'petiti#e ad#antage
Leari0 Re/ie): Leari0 O,!c(-e 4.+
Why is an internal analysis an important part of managing strategically
I It?s the only $ay to identify an organi(ation?s strengths and $eaknesses, and it?s needed for
'aking good strategic decisions "he o%tco'e of the process is i'portant infor'ation abo%t an
organi(ation?s specific assets, skills, and $ork ro%tines and processes With the infor'ation fro'
an internal analysis, strategic decision 'akers can 'ake intelligent &%dg'ents abo%t $hat
co'petiti#e ad#antages the organi(ation 'ight c%rrently ha#e, $hat 'ight potentially be
de#eloped into co'petiti#e ad#antages, and $hat 'ight be pre#enting co'petiti#e ad#antages
fro' being de#eloped
=UESTIONS>
"4. B+""+G KI9.
Leari0 O,!c(-e 4.1: Describe )'a! a i!era" aa"#sis is.
Internal analysis: process of e#al%ating an organi(ation)s reso%rces and capabilities
.esources *financial, physical, h%'an, intangible and str%ct%ral-c%lt%ral, can be a so%rce of
co'petiti#e ad#antage, b%t are also i'portant as the inp%ts needed for organi(ation)s
capabilities and core co'petencies
Organi'ational capabilities: #ario%s ro%tines and processes that transfor' inp%ts into o%tp%ts
"his doesn)t happen &%st by gathering together reso%rces Instead, the reso%rces ha#e to be %sed
and co'bined Organi'ational routines and processes: the reg%lar, predictable and se7%ential
$ork acti#ities done by organi(ational 'e'bers
As organi(ational 'e'bers do their $ork %sing reso%rces and ro%tines and processes, they learn
ho$ best to capt%re the #al%e o%t of those reso%rces and t%rn the' into possible core
co'petencies or distincti#e capabilities "he capabilities that lead to a co'petiti#e ad#antage
'ay change so organi(ations need to think in ter's of dynamic capabilities: an organi(ation)s
ability to b%ild, integrate, and reconfig%re capabilities to address changing en#iron'ents
*ore competencies: 'a&or #al%e-creating capabilities that are essential to an organi(ation)s
b%siness Are not so%rces of co'petiti#e ad#antage the'sel#es, b%t can contrib%te to de#eloping
distincti#e capabilities and i'pro#ing other organi(ational capabilities
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
$istincti!e organi'ational capabilities: the special and %ni7%e capabilities that disting%ish an
organi(ation fro' its co'petitors 4a#e three characteristics: */, contrib%tes to s%perior
c%sto'er #al%e, *0, diffic%lt for co'petitors to i'itate, and *=, can be %sed in a #ariety of $ays
Distincti#e capabilities can lead to a co'petiti#e ad#antage
Gain reason for doing internal analysis is to identify strengths *reso%rces organi(ation possesses
and capabilities organi(ation has de#eloped, both of $hich can be de#eloped into s%stainable
co'petiti#e ad#antage, and "ea(nesses *reso%rces and capabilities that are lacking or deficient
and pre#ent the organi(ation fro' de#eloping a s%stainable co'petiti#e ad#antage,
Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis.
"here are three different techni7%es to do an internal analysis: #al%e chain, internal a%dit, and
capabilities assess'ent profile
6alue chain: a syste'atic $ay of exa'ining all the organi(ation)s f%nctional acti#ities and ho$
$ell they create c%sto'er #al%e "he #al%e chain $as de#eloped by Gike >orter and foc%ses on
assessing the fi#e pri'ary and fo%r s%pport $ork acti#ities "he fi#e pri'ary acti#ities incl%de
inbo%nd logistics, operations, 'arketing and sales, o%tbo%nd logistics, and c%sto'er ser#ice
"he fo%r s%pport $ork acti#ities incl%de proc%re'ent, technological de#elop'ent, h%'an
reso%rce 'anage'ent and fir' infrastr%ct%re
Internal audit: a thoro%gh assess'ent of an organi(ation)s internal f%nctional areas It looks at
six organi(ational f%nctions: prod%ction3operations, 'arketing, research and de#elop'ent,
financial3acco%nting, 'anage'ent and infor'ation syste's
"he capabilities assess'ent profile is an in-depth e#al%ation of an organi(ation)s capabilities It
consists of t$o phases */, identifying distincti#e capabilities and *0, de#eloping and le#eraging
these distincti#e capabilities "he fi#e steps incl%de */, preparing a c%rrent prod%ct-'arket
profile, *0, identifying so%rces of co'petiti#e ad#antage and disad#antage in the 'ain prod%ct-
'arket seg'ents, *=, describing organi(ational capabilities and co'petencies, *4, sorting these
core capabilities and co'petencies according to their strategic i'portance, and *D, identifying
and agreeing on the key co'petencies and capabilities
An organi(ation)s strengths and $eaknesses can be assessed according to fo%r criteria: */, past
perfor'ance trends, *0, organi'ational goals: state'ents of desired o%tco'es, *=, co'petitor
co'parisons, and *4, personal opinions of strategic decision 'akers or cons%ltants
Co'petitor co'parisons can introd%ce legal and ethical iss%es
Leari0 O,!c(-e 4.+: Disc,ss )'# a i!era" aa"#sis is i-&(r!a!.
I'portant for t$o reasons: */, only $ay to identify an organi(ation)s strengths and $eaknesses
and *0, needed for 'aking good strategic decisions
S,00es!i(s 4(r ,si0 YOU as S!ra!e0ic Decisi( Ma7er: 1,i"*i0 #(,r S7i""s e%ercises
/ So% 'ay $ish to extend this exercise by ha#ing the class choose a brand for disc%ssion or perhaps
di#ide the class into gro%ps and ha#e each of the gro%ps choose a brand for disc%ssion "race the
history of that brand 4as it al$ays been the 'arket leader8 What factors lead to its pop%larity or its
de'ise if it is no longer the 'arket leader8 So'e brands to consider: "ylenol, Disney, Coke,
@irestone, Peneral Gotors, Chrysler ?Leari0 O,!c(-e 4.1: Describe a i!era" aa"#sis@
C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era"
e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0 s7i""sB
0 "o introd%ce this exercise ask the class if they are loyal c%sto'ers, and to $hat prod%cts, and $hy
+rgani(e the class into s'all gro%ps to for'%late the ans$ers to the 7%estions, and then go to the
Web site in class to e#al%ate the co'pany)s 'ission, c%lt%re and fo%nding #al%es ?Leari0
O,!c(-e 4.1: Describe a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a*
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
-(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Use (4 i4(r-a!i( !ec'("(0#;
Re4"ec!i/e !'i7i0 s7i""sB
= "his $o%ld be a good ti'e to introd%ce the ele'ents of infor'ation *ie, ti'eliness, rele#ance,
conciseness, co'pleteness, etc, as so'e of these ele'ents 'ay be the reason for non-%se
?Leari0 O,!c(-e 4.1: Describe a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe
!(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0
s7i""sB
4 So% 'ay also $ish to add "aiichi +hno)s 'ethod of asking $hy8! fi#e ti'es $hen atte'pting to
%nco#er the root of a proble' or action ?Leari0 O,!c(-e 4.1: Describe a i!era" aa"#sis@
C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era"
e/ir(-e!B
D "his is a good o%t-of-class gro%p assign'ent in $hich each st%dent gro%p reports back to the class
as a $hole ?Leari0 O,!c(-e 4.1: Describe a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es:
Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e
!'i7i0 s7i""sB
M It 'ay be helpf%l to ha#e a specific organi(ation in 'ind $hen $orking $ith this exercise Select
se#eral organi(ations fro' different ind%stries, incl%ding so'e not-for-profit organi(ations *eg,
2onald GcDonald 4o%se Charities, 2ed Cross, Apple, Gicrosoft or a local co'pany, ?Leari0
O,!c(-e 4.1: Describe a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a*
-(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!B
N Brainstor' $ith the class to identify so'e co'panies that ha#e achie#ed exceptional c%sto'er
profitability! Why $o%ld strategic 'anagers $ant to foc%s on one set of c%sto'ers8 Ask s'all
gro%ps to $ork together on this exercise and report back to the class as a $hole ?Leari0
O,!c(-e 4.+: Disc,ss )'# a i!era" aa"#sis is i-&(r!a!@ C(,rse Le/e" ObAec!i/es:
Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e
!'i7i0 s7i""sB
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
S!ra!e0ic Maa0e-e! i Ac!i( Cases
Case C1 Ma7i0 O/er A/(
/ "o be the top direct seller of cos'etics, the reso%rces a co'pany $o%ld need are in reality, all of
the' *financial, physical, h%'an, intangible and str%ct%ral-c%lt%ral, A#on possesses financial
reso%rces, b%t those ha#e been d$indling in recent year "hey ha#e n%'ero%s physical reso%rces,
b%t those need %pdating A strong h%'an reso%rce still exists $ithin the co'pany Brand
recognition is strong B%t, beca%se of 5%ng)s contin%ed presence e#en tho%gh she is to be
replaced, it 'ay $eaken the str%ct%ral-c%lt%ral reso%rce the fir' has "he capabilities are
de#elop'ent of ne$ prod%cts and keeping tabs on costs 4o$e#er, both of these areas ha#e been
$eak for the fir' ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse
Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@
AACS1: Re4"ec!i/e !'i7i0 s7i""sB
0 St%dents sho%ld be able to cite se#eral strengths *eg, #ery strong h%'an reso%rce, global
a$areness of the brand, and $eaknesses *eg, faltering financial sit%ation, leadership that re'ains
in fl%x, ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e"
ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1:
Re4"ec!i/e !'i7i0 s7i""sB
= Ans$ers 'ay #ary depending %pon the st%dent, b%t 'any $ill probably cite cond%cting a #al%e
chain analysis, doing an internal a%dit of f%nctional areas and other organi(ational ele'ents, and
cond%cting a capabilities assess'ent profile ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a
i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s
i!era" e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0 s7i""sB
4 Again, ans$ers $ill #ary >ossible responses 'ight incl%de the n%'ber and sales data of A#on)s
direct sales force, the re#en%e data per co%ntry or $orld region, and costs of 'an%fact%ring and
deli#ering prod%cts per co%ntry or $orld region ?Leari0 O,!c(-e 4.+: Disc,ss )'# a
i!era" aa"#sis is i-&(r!a!@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r
assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0 s7i""sB
Case C$ 5i22 5ac!(r
/ Based on the case, st%dents $ill likely 'ention as strong reso%rces financial, physical, and
intangible As for Coke)s global presence, there is so'e diffic%lty in keeping consistency a'ong its
capabilities and also 'aintaining the 7%ality of all its reso%rces ?Leari0 O,!c(-e 4.$: E%&"ai
'() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r
assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0 s7i""sB
0 A #ariety of ans$ers 'ay be offered by st%dents, b%t one note$orthy capability is Coke)s
partnership $ith n%'ero%s bottlers thro%gho%t the $orld ?Leari0 O,!c(-e 4.$: E%&"ai '()
!( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a
4ir-3s i!era" e/ir(-e!B
+. "his co%ld be approached as an in-class disc%ssion $ith tea's A $ide #ariety of responses are
possible ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e"
ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1:
Use (4 i4(r-a!i( !ec'("(0#; Re4"ec!i/e !'i7i0 s7i""sB
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
4. St%dents 'ay select any of the three approaches disc%ssed in the chapter *#al%e chain analysis,
internal a%dit of f%nctional areas and other organi(ational ele'ents, and capabilities assess'ent
profile, Be s%re they clearly &%stify $hy they chose their respecti#e approach ?Leari0
O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe
!(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!B
Case C+ S'((!i0 4(r S,ccess
1. "alented playersTthe best in the $orld Stars fro' foreign co%ntries A prod%ct that can be easily
'arketed across borders *broadcasting ga'es, p%shing 'erchandise, In trying to for'%late %ni7%e
reso%rces and prod%cts there is a trade off bet$een locali(ed leag%es and si'ply 'arketing a global
prod%ct *JS leag%e play and 'erchandise, Sho%ld the 9BA p%sh into foreign national leag%es8
.xperiences in those co%ntries so far 'ay pro#ide %ni7%e opport%nities to de#elop tea' leag%es or
e#en create a $orld leag%eTb%t it is not clear $hether that is a great opport%nity or not >roble's
co%ld arise $ith existing leag%esC there is probably not eno%gh fan s%pport for '%ltiple leag%es *nor
eno%gh sponsor s%pport, b%t local leag%es 'ay be #%lnerable to takeo#er and affiliation $ith the
9BA is a prestige affiliationTnational pride 'ay $ork against yo%Ti'agine the reaction a foreign
leag%e $o%ld face if it tried to take o#er Ga&or Keag%e BaseballU ?Leari0 O,!c(-e 4.$:
E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s
4(r assessi0 a 4ir-3s i!era" e/ir(-e!B
$. Eal%e chain analysis to identify ser#ices that are not offered in the 'arket b%t that c%sto'ers $ill
#al%e Internal a%dit to spot inefficiencies and poor exec%tion in prod%ct deli#ery @or exa'ple,
ho$ does the 9BA perfor' in contracting for tele#ision royalties in foreign co%ntries8 "hat co%ld
be exa'ined in an a%dit
Capabilities assess'ent $o%ld spot $hat the leag%e co%ld do *set %p franchises $orld$ide, regional
leag%es, yo%th basketball ca'ps, ad#ertising, 'erchandising, broadcasting, A key thing to keep in
'ind is that the prod%ct is s%ch a high dollar in#est'ent and offers s%ch strong ret%rns that s'all
efficiencies are probably not the best place to be $orking Instead, foc%sing on ho$ to exploit
opport%nities $ith the existing prod%cts is probably their best %se of ti'e +nce the 'arket is tr%ly
sat%rated, then ne$er opport%nities or efficiencies 'ay be better $ays to in#est for f%t%re profits
fro' the leag%e ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse
Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!B
+. Kocal offices in 'any co%ntries help the 9BA exploit its established i'age, help keep the leag%e
a$are of b%dding local talent and help keep cons%'ers a$are of the 9BA brand Jse of the Internet
helps o#erco'e the $eakness that ga'es are broadcast only in so'e areasTif they really $ant it
they can s%bscribe o#er the $eb and can sell 'erchandise $itho%t local stores "he $eakness is that
the c%sto'er '%st seek the' o%t and by not ha#ing local stores in 'any locations there is an
opport%nity for local pro#iders to s%pply i'itation or knock-off! prod%cts and not pay royalties
?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es:
Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era" e/ir(-e!B
Case C 4 Ne) Reci&e
1. Creati#e 'edia presentations, recogni(ed expertise in li#ing elegantly,! i'age as an arbiter of
ho'e style, 'erchandise to s%pport the style! that co%ld be pl%gged along $ith the "E sho$ and
the 'aga(ine Gartha)s legal tro%bles ha#e tarnished the brand beca%se she $as sho$ing %s ho$ to
li#e better and then did so'ething illegal, 'aking %s 7%estion her &%dg'ent in other areas
Interestingly her co'pany)s depressed stock price $ent %p abo%t /<1 $hen she asked a &%dge to let
her begin ser#ing &ail ti'e e#en tho%gh she is appealing the co%rt decision and 'aintains her
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Chapter 4 Assessing Strengths and Weaknesses: Doing an Internal Analysis
innocence In#estors $ant her to be able to co'e back and infl%ence the co'pany A key 7%estion
is to %nderstand $hy people bo%ght her 'aga(ine, $atched the sho$ and bo%ght related prod%ctsT
$as it beca%se of Gartha8 Was it beca%se she ga#e great ad#ice8 Both8 ?Leari0 O,!c(-e 4.$:
E%&"ai '() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s
4(r assessi0 a 4ir-3s i!era" e/ir(-e!@ AACS1: Re4"ec!i/e !'i7i0 s7i""sB
$. Ses, b%t $ithin li'its >eople liked $hat Gartha soldT$hy not rehabilitate her starting $ith her
ser#ing her sentence prior to appealTit 'akes her a bit of a 'artyr and 'any people $ant to be able
to s%pport her again "he co'pany co%ld bring in g%est stars to replace her, or take the sho$ to
great locations "hey co%ld also introd%ce her ne$ prod%cts %nder a different brand na'e b%t still
%tili(e her design talent and GS+)s established relationships $ith ho%se$are 'an%fact%rers and
distrib%tion capabilities "hey co%ld %se this as an opport%nity to 'o#e their $ares into other
distrib%tion o%tlets s%ch as Gacy)s, "arget and Vohl)s $itho%t %sing her na'e $hich is tied in $ith
V'art
Gartha Ste$art)s rehabilitation screa's! 'arket opport%nity, b%t as she is still not ad'itting to a
proble' her #isits to late night talk sho$s 'ay be too stor'y Still, if yo% consider 5anet 2eno a
si'ilar case, her appearances on Sat%rday 9ight Ki#e helped her o#erco'e the stig'a of the Waco
assa%lt and the .lian Pon(ale( contro#ersy So'e people $ill contin%e to be against Gartha
Ste$art on 'oral gro%nds and those c%sto'ers $ill be lostTif she is capable of an HI)' sorry,
please forgi#e 'eCH she $ill do better in a re#i#ed career ?Leari0 O,!c(-e 4.$: E%&"ai '()
!( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a
4ir-3s i!era" e/ir(-e!@ AACS1: Use (4 i4(r-a!i( !ec'("(0#; Re4"ec!i/e !'i7i0
s7i""sB
+. GS+ clearly needs good intelligence in that the 'arket has beco'e #ery cro$ded $ith aggressi#e
co'peting sho$s GS+ needs to kno$ $hoL$hen and ho$ they are being attacked as $ell as
$here the 'arket is 'o#ing so that they do not 'iss shifts as the 'arket appears to 'at%re Spend a
bit of ti'e on the 4P"E net$ork and it $ill beco'e #ery apparent that the field has beco'e
cro$ded GS+ needs to %nderstand $here these attacks are co'ing fro' and ho$ to position their
prod%cts in a 'ore cro$ded space ?Leari0 O,!c(-e 4.$: E%&"ai '() !( *( a i!era"
aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r assessi0 a 4ir-3s i!era"
e/ir(-e!B
4. A #al%e chain analysis can identify areas $here GS+ co%ld la%nch ne$ ser#ices that c%sto'ers
$o%ld #al%e *for exa'ple, $hat abo%t GS pre'i%' tra#el ser#ices that $o%ld pro#ide Gartha
Ste$art le#el! tra#el experiencesTher rep%tation for being de'anding $o%ld be a pl%s in that
b%siness, "he analysis 'ight also re#eal c%sto'er needs that sho%ld be a#oided, s%ch as a Gartha
Ste$art brand na'e for financial ser#ices "he nat%re of the scandal 'akes financial ad#ice fro'
Gartha proble'atic no$, b%t 'ight ha#e been #ery possible before the scandal An a%dit $o%ld
help deter'ine if c%rrent operations are so%nd so that they can keep going %ntil the contro#ersy ends
and the brand can be res%scitated A capabilities assess'ent co%ld be %sed to deter'ine if strengths
can be %sed in ne$ $ays to b%ild %p the organi(ation and to identify 'issing or $eak areas to keep
this scandal and others fro' f%rther da'aging the organi(ation ?Leari0 O,!c(-e 4.$: E%&"ai
'() !( *( a i!era" aa"#sis@ C(,rse Le/e" ObAec!i/es: Describe !(("s a* -(*e"s 4(r
assessi0 a 4ir-3s i!era" e/ir(-e!B

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