Strategic Management

Internal Appraisal

Types of Internal Appraisal

 Introduction...
• 3 Key ingredients for strategic
management:-
 Consistent
 Realistic
 Compatible
 Internal Appraisal
Analyzing the strength and weakness

Company Profile

Strategy Formulation
Types of internal analysis
 Historical Analysis
 Evolution Analysis
 Competitive Analysis
 Critical Success Factors
 Historical Analysis

1. Past Experience.
2. Functional Area Profile (FAP)
3. Functional Area Resource Deployment
(FARD) Matrix
 Functional Area Profile (FAP)
Area / Financial Fund Physical Personnel Organization Technology
Function Allocation Resource &
Systems
Production Allocation on: Size & capacity Competence Quality New techno, new
& Plant, Equipment of plant, ,skill, monitoring products,
Operations Inventory, type of turnover systems Performance
Labour technology of key control of machines
& personne systems etc..
equipment l

R&D
&
Engineering
Marketing

Finance
&
Accounting
Corporate
Management
 Functional Area Resource
Deployment (FARD) Matrix
Functional area Resource 3 years 2 years 1 year Current 1 year 2 years 3 years
deployment befor bef befo year after after after
e ore re
Production Fund allocated as a
& % of total
Operations
Focus
R&D Fund allocated as a
& % of total
Engineering
Focus
Marketing Fund allocated as a
% of total

Focus
Finance Fund allocated as a
& % of total
Accounting
Focus
Corporate Fund allocated as a
Management % of total

Focus
 Evolution Analysis
PLC & Strategy
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Research & Development Department:
 Introduction stage
 Emphasis on R&D personnel
 Innovative & Creative idea
 Adequate infrastructure
 Long term vision

 Growth Stage
 Expert knowledge & skill to solve bottle necks.
 Better customer liaison, support, feed back.
 Modification of existing products.
Research & Development Department:

 Maturity stage
 Product modification
 Product differentiation

 Decline stage
 Work on the foundation laid down during the growth stage
to develop new products.
 Competitive Analysis

1. Strategic Advantage Profile

2. Financial Analysis
3. Value Chain Analysis
 Strategic Advantage Profile
Strength (+)
Sl.No: Functional Areas Core Factors 0r
Weakness(-)
1. R&D (+)
& 1. Patent right (-)
Engineering 2. Unreliable foreign collaborators

2. Finance (+)
& 1. Sound finance (+)
Accounting 2. Low debit equity ratio

3.
Marketing

4. Production
&
Operations

5. Corporate
Management
 Financial Analysis
1. Ratio Analysis
 Liquidity ratio
 Leverage ratio
 Activity ratio
 Profitability ratio
2. Du Pont financial analysis
3. Analysis of source and uses of funds
 Value Chain Analysis
Margin = Price - Cost
S
u Firms infrastructure
p
p Human Resource Management
or M
ti Technology
A
n Procurement
g R

G
Inbound Operations Outbound Marketing After
logistics logistics I
& Sales
Services N
Sales

Primary Activities
 Critical Success Factors

1.Ansoff’s Matrix

2.Porter’s Model
Thank you!