Paras, Aliana Rose P.

IE166/E01

1) What is the basic difference between broad environment and task environment? (1
pt.) What insight can be gained after doing external analysis? (2 pts.)
The broad environment  consists of domestic and global environmental forces such as
sociocultural, technological, political, and economic trends while task
environment  consists of external stakeholders (groups or individuals outside the
organization that are significantly influenced by or have a major impact on the
organization) with whom organizations interact on a fairly regular basis . 
Gaining insight about the markets you operate in is an essential part of your strategic
planning process. You need to understand the trends that are obvious and those that
are emerging in your market and what you can or can’t do to influence those trends. 

3) How are the results of Competitive Strength Assessment or Competitive Profile

Matrix used? Be specific in pointing out its significance. (3 pts.)

The purpose of the competitive analysis is to determine the strengths and weaknesses

of the competitors within your market, strategies that will provide you with a distinct
advantage, the barriers that can be developed in order to prevent competition from
entering your market, and any weaknesses that can be exploited so a company would
know, which areas it should improve and, which areas to protect. 

2) What needs to be done in using the Porter's 5 Forces Model of Competition and
why? (3 pts.)
To understand whether new products or services are potentially profitable.  Because
it helps to inform decisions relating to whether to enter a specific industry; whether to
increase capacity in a specific industry; and developing competitive strategies.  

4) In a nutshell, explain the difference resources and capabilities and their importance in
strategic planning. (2 pts.)

How are they converted into competitive advantage(s)? (2 pts.)

Resources can be tangible or intangible. The skills your resources possess are
elements which you use in daily business processes to generate a certain service or
product. Capabilities, on the other hand, are a collection of these skills, experience and
qualifications. 
The 3 factors that help you obtain profits from your resources and capabilities are their
ability to
 Establish a competitive advantage,
 Sustain that competitive advantage
 Appropriate the returns to that competitive advantage.

5.) What can a value chain analysis (VCA) contribute in internal analysis? DO NOT
DEFINE but EXPLAIN briefly the SIGNIFICANCE of the findings that can be gained in
conducting VCA. (3 pts.)
Its goal is to recognize, which activities are the most valuable to the firm and which ones
could be improved to provide competitive advantage.  In other words, by looking into
internal activities, the analysis reveals where a firm’s competitive advantages or
disadvantages are. If it competes through cost advantage, it will try to perform internal
activities at lower costs than competitors would do. When a company can produce
goods at lower costs than the market price or to provide superior products, it earns
profits.

6) EXPLAIN in your own words the benefit of doing a strategic group map.

It helps you see how your objectives affect the others. For instance, the Balanced
Scorecard divides important objectives into four
perspectives: Financial, Customer, Process, and People. When you look at these
perspectives on a strategy map, you can literally see which objective is the most
critical, and how the success or failure of each objective changes the whole strategic
plan. 

7) Which must come first - external analysis or internal analysis? Explain briefly why. (3
pts.)
An external analysis identifies opportunities and threats while an internal analysis
indicates the company's strengths and weaknesses. One could argue that a company's
strategy should attempt to exploit the opportunities. By this argument, an external
analysis should come first.  
8.) EXPLAIN in your own words what strategic fit is. 
Strategic fit exists if the company has the actual resources and capabilities to execute
and support the strategy.