Unit – 3

2019
a) What is internal analysis? *3
Ans: Internal analysis is the process by which executives
examines the organization’s internal resource factors (e.g.,
finance, marketing, distribution, production and operations,
human resource, etc.) to determine the strengths and weakness
of the organizations.

b) State one utility of SWOT analysis. *3

Ans: Utility/uses/advantages of SWOT analysis are:

1. Strategic planning and decision making: A SWOT analysis

is a useful tool for brainstorming and strategic planning.
You'll get more value from a SWOT analysis if you conduct it
with a specific objective or question in mind.
2. Building on strengths: A SWOT analysis will help you
identify areas of your business that are performing well.
These areas are your critical success factors and they give
your business its competitive advantage.
3. Minimizing weaknesses: Weaknesses are the characteristics
that put your business at a disadvantage to others.
Conducting a SWOT analysis can help you identify these
characteristics and minimize or improve them before they
become a problem.
4. Seizing opportunities: A SWOT analysis can help you
identify opportunities that your business could take
advantage of to make greater profits. Opportunities are
created by external factors, such as new consumer trends and
changes in the market.
5. Counteracting threats: Threats are external factors that could
cause problems for your business, such as changes to the
market, a competitor's new advertising campaign, or new
government policy. A SWOT analysis can help you identify
 threats and ways to counteract them, depending on your
strengths and weaknesses.

1. a) Briefly discuss the concept of core competencies. *3

b) Describe the primary and support activities of a value chain. *3
6+6=12

Ans: (a)

Definition of Core Competencies:

For any organization, its core competencies refer to the capabilities, knowledge, skills
and resources that constitute its "defining strength." A company's core competency is
distinct, and therefore not easily replicated by other organizations, whether they're
existing competitors or new entrants into its market.

An organization's core competencies -- sometimes called core capabilities or

distinctive competencies -- explain what it can do better than any other company, and
why. These capabilities provide a strong foundation from which the business will
deliver value to customers and stakeholders, seize new opportunities and grow. They
set the company apart from its peers and help create a sustained competitive
advantage in its industry or sector.
Core Competencies in Business
A business can choose to be operationally excellent in a number of different ways.
Below are common core competencies found in business:

 Greatest Quality Products. This core competency means the company's

products are most durable, long-lasting, and most reliable. The company will
likely have invested in the strongest quality control measures, technically
proficient workers, and high-quality raw materials.

 Most Innovative Technology. This core competency means the company is
an industry leader in its sector. The company will likely have invested heavy
amounts of capital into research & development, holds many patents, and
hires experts in respective fields.

 Best Customer Service. This core competency means customers have the
greatest experience during (and after) their purchase. The company will likely
have invested in training for staff, large numbers of customer service
representatives, and processes to manage exceptions or issues as they arise.

 Largest Buying Power. This core competency leverages a company's
economy of scale. This company will likely have invested in mergers or
acquisitions and have built up strong relationships with vendors to gain
favourable pricing or service.

 Strongest Company Culture. This core competency promotes the internal
atmosphere of the business. The company aims to attract the best talent by
investing heavily in employee recognition, development, or collaborative, fun
events.

 Fastest Production or Delivery. This core competency means the company
is able to make or ship items the fastest. The company will likely have invested
in connected software systems as well as production processes and
distribution relationships.

 Lowest Cost Provider. This core competency means the company charges
the lowest price among comparable goods. The company will likely have
invested in the most efficient processes to reduce labour or material input.

 Highest Degree of Flexibility. This core competency allows the company to
quickly pivot in response to business opportunities or challenges. The
company will likely have invested in cross-training across employees or nimble
software solutions.
(b)

Porter’s Value Chain

Definition: Porter’s value chain or VCA (Value Chain Analysis) refers to the analysis and
planning of a series of business activities (primary and secondary). These activities
should be executed in such a manner that it adds value or utility to the customer
experience from their purchase of products or services.

Value chain refers to a set of activities which are carried out systematically, to add utility
to the final products or services offered for sale. Value creation is a significant part of all
business transactions today.

Porter’s Value Chain Primary Activities

Inbound Logistics
Inbound logistics include the receiving, warehousing, and inventory control of a
company's raw materials. This also covers all relationships with suppliers. For
example, for an e-commerce company, inbound logistics would be the receiving and
storing of products from a manufacturer that it plans to sell.

Operations
Operations include procedures for converting raw materials into a finished product or
service. This includes changing all inputs to ready them as outputs. In the above e-
commerce example, this would include adding labels or branding or packaging
several products as a bundle to add value to the product.

Outbound Logistics
All activities to distribute a final product to a consumer are considered
outbound logistics. This includes delivery of the product but also includes storage
and distribution systems and can be external or internal. For the e-commerce
company above, this includes storing products for shipping and the actual shipping
of said products.

Marketing and Sales

Strategies to enhance visibility and target appropriate customers—such as
advertising, promotion, and pricing—are included in marketing and sales. Basically,
these all activities that help convince a consumer to purchase a company’s product
or service. Continuing with the above example, an e-commerce company may run
ads on Instagram or build an email list for email marketing.

Services
This includes activities to maintain products and enhance consumer experience—
customer service, maintenance, repair, refund, and exchange. For an e-commerce
company, this could include repairs or replacements, or a warranty.

Porter's Value Chain Support (Secondary) Activities

Now, companies can further improve the primary activities of their value chain with
secondary activities. Value chain support the primary activities. The support, or
secondary, activity generally plays a role in each primary activity. Such as human
resource management, which can play a role in operations, marketing and sales.
Here are the four supporting activities.

Firm Infrastructure
Infrastructure covers a company's support systems and the functions that allow it to
maintain operations. This includes all accounting, legal, and administrative functions.
A solid infrastructure is necessary for all primary functions.

Firm infrastructure refers to how the firm is organized and led by

executives. The effects of this organizing and leadership can be profound.

These are a company's support systems, and the functions that allow it to maintain
daily operations. Accounting, legal, administrative, and general management are
examples of necessary infrastructure that businesses can use to their advantage.

Human Resource Management

Hiring and retaining employees who will fulfill business strategy, as well as help
design, market, and sell the product. Overall, managing employees is useful for all
primary activities, where employees and effective hiring are needed for marketing,
logistics, and operations, among others.

This is how well a company recruits, hires, trains, motivates, rewards, and retains its
workers.
Technological Development
Technological development is used during research and development and can
include designing and developing manufacturing techniques and automating
processes. This includes equipment, hardware, software, procedures, and technical
knowledge. Overall, a business working to reduce technology costs, such as shifting
from a hardware storage system to the cloud, is technological development.

Procurement
Procurement is the acquisition of inputs, or resources, for the firm. This is how a
company obtains raw materials; thus, it includes finding and negotiating prices with
suppliers and vendors. This relates heavily to the inbound logistics primary activity,
where an e-commerce company would look to procure materials or goods for resale.

Procurement is the act of obtaining or purchasing goods or services, typically for

business purposes. Procurement is most commonly associated with businesses
because companies need to purchase goods, usually on a relatively large scale.

2. Write short notes on any two of the following:

a) Internal Factor Evaluation Matrix or Strategic Advantage Profile
*3 6
Ans: Written Below

2018

3. b) In the context of internal analysis and diagnosis, discuss the factors

that firms need to consider in the area of (i) marketing and distribution
(ii) corporate resources. *3 6+6=12
Ans: Haven’t written the answer because it’s hard to find the answer.

10. Write short notes on any two of the following:

a) SWOT analysis *3 6
Ans:
Definition:
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework
used to evaluate a company's competitive position and to develop strategic planning.
SWOT analysis assesses internal and external factors, as well as current and future
potential.
A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at
the strengths and weaknesses of an organization, initiatives, or within its industry.
The organization needs to keep the analysis accurate by avoiding pre-conceived
beliefs or Gray areas and instead focusing on real-life contexts. Companies should
use it as a guide and not necessarily as a prescription.

Components of SWOT Analysis

Every SWOT analysis will include the following four categories. Though the
elements and discoveries within these categories will vary from company to
company, a SWOT analysis is not complete without each of these elements:

Strengths
Strengths describe what an organization excels at and what separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique
technology, and so on. For example, a hedge fund may have developed a
proprietary trading strategy that returns market-beating results. It must then decide
how to use those results to attract new investors.

Weaknesses
Weaknesses stop an organization from performing at its optimum level. They are
areas where the business needs to improve to remain competitive: a weak brand,
higher-than-average turnover, high levels of debt, an inadequate supply chain, or
lack of capital.

Opportunities
Opportunities refer to favourable external factors that could give an organization a
competitive advantage. For example, if a country cuts tariffs, a car manufacturer
can export its cars into a new market, increasing sales and market share.

Threats
Threats refer to factors that have the potential to harm an organization. For example,
a drought is a threat to a wheat-producing company, as it may destroy or reduce the
crop yield. Other common threats include things like rising costs for materials,
increasing competition, tight labour supply. and so on.

2017
d) What do you mean by internal analysis? *3
Ans: Written Above
3. a) Explain the construction details of Internal Factors Evaluation
matrix or strategic advantage profile. *3
b) Briefly describe the primary and support activities of a value
chain. *3
6+6=12

Ans: (b)Written Above

(a)Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate
firm’s internal environment and to reveal its strengths as well as weaknesses. [1]

External Factor Evaluation (EFE) Matrix is a strategy tool used to examine

company’s external environment and to identify the available opportunities and
threats.

*** (Just turn External into Internal, the process is same) ***

How to Prepare Internal Factor Evaluation Matrix (EFE

Matrix)
The process of development of the Internal factor Evaluation Matrix is completed in the five
steps which are as follows.

1. Listing of Key Internal Factors (10-20):

All those factors which can affect the Internal Factor Evaluation matrix are listed in this step.
Two points should be kept in mind while listing these key external factors which are the
strengths & weaknesses.

2. Assigning of Weight to Each factor (0 to 1.0):

In the second step of preparation of the Internal Factor Evaluation matrix, all the identified
factors are arranged on the basis of their weightage which is according to their importance
intensity. This weightage should be represented in percentage term. But the main point of
consideration in this step is that all the sum of all the factors must be equal to one.

3. Assigning of 1-4 rating to each factor:

Each factor in this step should be assigned some rating which ranges from 1 to 4. These ratings
are based on the responses of the organization to the factors under consideration.

4. Multiplication of Weight of Each Factor by its Rating:

In this step, the weight assigned to each factor is multiplied to it’s the rating assigned to it. This
generates a weighted score.

5. Summing up of the Weighted Score of Each Factor:

In the last step of the Internal Factor Evaluation matrix, the weighted score of each factor is
summed up in order to ascertain the total weighted score for the entire organization. The
organization that has the highest possible score is 4.0 & the lowest possible score is 1.0 while
the average possible score is 2.5.

10. Write short notes on the following:

a) Core competencies *3 6
Ans: Written Above

2016
 (f) State two support activities of a value chain. *3
Ans: Written Above

10. Write short notes on the following:

(b) SWOT analysis *3
6+6=12
Ans: Written Above

2014

(e) What do you mean by value chain analysis? *3

Ans: Written Above
3. (b) Briefly describe the support activities of a value chain. *3 8+
(4) = 12
Ans: Written Above