Organisational Apprisal

Prof P.P.Sengupta
Understanding Organizational Appraisal
• Definition: Organizational appraisal refers to the process of evaluating
various aspects of an organization's performance, effectiveness, and
efficiency.
• Importance: It helps organizations identify strengths, weaknesses,
opportunities, and threats, facilitating informed decision-making and
continuous improvement.

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Types of Organizational Appraisal

• Performance Appraisal:
• Evaluates individual and team performance.
• Focuses on productivity, quality, and adherence to standards.
• Financial Appraisal:
• Analyzes financial health, profitability, and viability.
• Includes financial ratios, budget analysis, and financial forecasting.
• Structural Appraisal:
• Examines organizational structure, hierarchy, and workflow.
• Assesses efficiency, communication channels, and decision-making processes.
• Cultural Appraisal:
• Evaluates organizational culture, values, and norms.
• Considers employee satisfaction, engagement, and alignment with organizational goals.
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Strategic Advantage Diagnosis
• Strategic Advantage Diagnosis(SAD) is a comprehensive assessment
process aimed at evaluating an organization's competitive position and
identifying opportunities for strategic advantage.
• It involves analyzing various internal and external factors that impact
the organization's ability to create value, differentiate itself from
competitors, and achieve sustainable success in the market.

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Strategic Advantage Diagnosis
• Strategic advantage is the properties and features of an organisation,
which give it a leading edge in the market in comparison of it’s
competitors.
• Some examples are
• Superior Technology ( Sony)
• Efficient distribution channel ( ITC)
• Brand image ( Colgate)
• Low cost of production ( Amul)
• Intellectual property ( Coca-Cola)
• Better location (McDonald)
• Access to raw materials ( Reliance)
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Strategic Advantage Profile
• Steps
• Organisational Capability Factors (OCF)
• Financial Capability
• Marketing Capability
• Oprations Capability
• Human Resource Capability
• General Management Capabilty
• Strategic Advantage Profile

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Organizational Capability Factors (OCF)
• Organizational Capability Factors (OCF) refer to the key elements or attributes within an
organization that contribute to its overall performance, competitiveness, and ability to achieve its
strategic objectives.
• These factors encompass various dimensions of organizational capacity, resources, and capabilities
that enable the organization to effectively execute its business activities and adapt to changing
environments. Here's a breakdown of the key components of Organizational Capability Factors:
1. Human Capital: Human capital encompasses the knowledge, skills, expertise, and competencies
of employees within the organization. Factors such as employee qualifications, experience,
training, and talent management practices contribute to the organization's human capital. A skilled
and motivated workforce is essential for driving innovation, productivity, and organizational
effectiveness.
2. Strategic Leadership: Strategic leadership refers to the ability of top management to establish a
clear vision, set strategic direction, and effectively guide the organization towards its goals. Factors
such as leadership style, vision clarity, decision-making processes, and communication
effectiveness influence the organization's strategic leadership capabilities.
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Organizational Capability Factors (OCF)
3. Organizational Culture: Organizational culture represents the shared values, beliefs, norms, and
behaviors that define the character and identity of the organization. Factors such as employee
engagement, teamwork, collaboration, trust, and adaptability contribute to the organization's culture.
A positive and supportive culture fosters employee morale, innovation, and organizational resilience.
4. Operational Excellence: Operational excellence involves the organization's ability to efficiently and
effectively execute its core business processes and deliver high-quality products or services to
customers. Factors such as process efficiency, quality management, supply chain management, and
continuous improvement practices contribute to operational excellence. Streamlined processes and
operational efficiencies enhance competitiveness and customer satisfaction.
5. Innovation and R&D Capabilities: Innovation and research & development (R&D) capabilities are
critical for driving organizational growth, competitiveness, and differentiation. Factors such as
investment in R&D, technological capabilities, creativity, and agility in adapting to market changes
influence the organization's innovation capabilities. A culture of innovation and the ability to develop
new products, services, or processes can provide a sustainable competitive advantage.

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Organizational Capability Factors (OCF)
6. Financial Resources and Stability: Financial resources and stability are essential for supporting
the organization's strategic initiatives, investments, and growth aspirations. Factors such as
financial strength, liquidity, profitability, capital structure, and risk management practices
influence the organization's financial capabilities. Sound financial management and access to
adequate funding are crucial for ensuring organizational resilience and sustainability.
7. Customer Focus and Market Orientation: Customer focus and market orientation involve
understanding customer needs, preferences, and market dynamics to deliver value-added products or
services. Factors such as market research, customer relationship management, branding, and
customer satisfaction measurement contribute to the organization's customer focus. Aligning business
strategies with market trends and customer expectations enhances competitiveness and growth.
8. Technological Infrastructure: Technological infrastructure encompasses the systems, tools, and IT
capabilities that support the organization's business operations and enable digital transformation.
Factors such as IT infrastructure, software applications, cybersecurity, data analytics, and
digitalization capabilities influence the organization's technological readiness. Leveraging advanced
technologies and digital solutions can drive efficiency, innovation, and competitive advantage.

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Organizational Capability Factors (OCF)
9. Partnerships and Collaborations: Partnerships and collaborations with external stakeholders
such as suppliers, distributors, strategic alliances, and industry associations can enhance the
organization's capabilities and market reach. Factors such as partner selection, relationship
management, and collaboration effectiveness contribute to the organization's partnership
capabilities. Building strong partnerships and networks can create synergies, expand resources, and
mitigate risks.
10. Adaptability and Change Management: Adaptability and change management capabilities are
crucial for navigating uncertainty, volatility, and disruptive changes in the business environment.
Factors such as organizational agility, change readiness, resilience, and learning orientation
influence the organization's ability to adapt to change. Effective change management practices and
flexibility in responding to market dynamics are essential for sustaining competitive advantage.
• Overall, Organizational Capability Factors encompass a broad range of elements that collectively
determine an organization's capacity to succeed and thrive in today's dynamic and competitive
business landscape. By assessing and enhancing these capabilities, organizations can strengthen their
strategic position, drive performance excellence, and achieve long-term success.

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Amazon’s OCF
1.Human Capital:
• Amazon has a diverse workforce consisting of employees with various skills and expertise,
including software engineers, data scientists, logistics specialists, and customer service
representatives.
• The company emphasizes continuous learning and development through training programs, career
advancement opportunities, and leadership development initiatives.
• Amazon values innovation and encourages employees to think creatively and experiment with new
ideas.
2.Strategic Leadership:
• Amazon's CEO, Jeff Bezos (until his departure in July 2021), was known for his visionary
leadership style, long-term perspective, and focus on customer-centric innovation.
• The leadership team at Amazon emphasizes a culture of customer obsession, operational
excellence, and long-term thinking.
• The company's leadership fosters a culture of risk-taking, experimentation, and rapid decision-
making to drive innovation and growth.
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Amazon’s OCF
3. Organizational Culture:
• Amazon's culture is characterized by its principles, known as "Leadership Principles," which
include customer obsession, innovation, ownership, frugality, and bias for action.
• The company promotes a fast-paced and results-driven culture where employees are encouraged
to take ownership of their work, think big, and deliver results.
• Amazon values diversity, inclusion, and collaboration, aiming to create a supportive and
inclusive work environment.
4. Operational Excellence:
• Amazon is renowned for its operational efficiency and supply chain capabilities, enabling it to
offer fast delivery and a wide selection of products to customers.
• The company leverages advanced technology and automation in its fulfillment centers, logistics
network, and cloud infrastructure (Amazon Web Services) to optimize operations.
• Continuous improvement initiatives, such as the Kaizen methodology, are ingrained in Amazon's
culture to drive operational excellence and cost efficiency.

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Amazon’s OCF
5. Innovation and R&D Capabilities:
• Innovation is at the core of Amazon's strategy, with a focus on disruptive technologies, such as
artificial intelligence (AI), machine learning (ML), robotics, and voice recognition (Amazon Alexa).
• Amazon invests heavily in research and development (R&D) to develop new products, services, and
technologies, such as Amazon Prime, Amazon Echo, and Amazon Go.
• The company encourages experimentation and supports initiatives like Amazon Web Services
(AWS) Activate, which provides resources for startups to innovate using AWS cloud services.
6. Financial Resources and Stability:
• Amazon has a strong financial position, driven by its diverse revenue streams, including e-
commerce, cloud computing, digital content, advertising, and subscription services.
• The company generates significant cash flow from operations, enabling it to invest in growth
initiatives, R&D, and strategic acquisitions.
• Amazon's financial stability and access to capital markets provide it with flexibility and resilience to
navigate market challenges and pursue long-term growth opportunities.

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Amazon’s OCF
7. Customer Focus and Market Orientation:
• Customer obsession is a core value at Amazon, with a relentless focus on meeting customer needs,
enhancing the shopping experience, and delivering value.
• The company leverages data analytics and customer insights to personalize recommendations,
optimize pricing, and improve the overall customer experience.
• Amazon's customer-centric approach drives customer loyalty, repeat purchases, and positive word-
of-mouth, contributing to its market leadership and growth.
8. Technological Infrastructure:
• Amazon operates one of the world's largest and most advanced technological infrastructures,
supporting its e-commerce platform, cloud computing services (AWS), digital content delivery, and
logistics operations.
• The company continually invests in building and scaling its technology infrastructure to support
innovation, scalability, and reliability.
• Amazon's technology platforms enable it to offer scalable and reliable services to millions of
customers worldwide, driving efficiency and competitiveness.
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Amazon’s OCF
9. Partnerships and Collaborations:
• Amazon collaborates with a wide range of partners, including suppliers, sellers, developers,
content creators, and third-party service providers, to expand its ecosystem and enhance value for
customers.
• The company's partnerships with logistics providers, payment processors, and technology partners
enable it to offer a seamless and integrated shopping experience to customers.
• Amazon also partners with governments, nonprofits, and industry organizations to address social
and environmental challenges and promote sustainability.
10.Adaptability and Change Management:
• Amazon has demonstrated adaptability and resilience in responding to market dynamics,
technological disruptions, and regulatory changes.
• The company embraces a culture of innovation, experimentation, and rapid iteration, allowing it to
quickly adapt to changing customer preferences and market trends.
• Amazon's decentralized organizational structure and agile decision-making processes facilitate
adaptability and enable it to seize new opportunities and address emerging challenges effectively.
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Strategic Advantage Profile (SAP)
• The Strategic Advantage Profile (SAP) is a strategic management tool
used to assess an organization's competitive position and performance
relative to its competitors within an industry.
• Developed by the consulting firm Arthur D. Little, SAP provides a
structured framework for analyzing various dimensions of
competitiveness and identifying areas for strategic improvement.

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Strategic Advantage Profile (SAP)
1.Industry Analysis: The first step in creating a Strategic Advantage Profile is to
conduct a comprehensive analysis of the industry in which the organization
operates. This involves examining factors such as market size, growth rate,
industry structure, competitive dynamics, and regulatory environment.
Understanding the broader industry context is essential for identifying the key
drivers of competitiveness and strategic priorities.
2.Competitor Analysis: Once the industry landscape is understood, the next step is
to analyze the organization's competitors. This includes identifying direct
competitors as well as potential substitutes and new entrants. Competitor analysis
involves assessing competitors' strengths, weaknesses, strategies, market
positioning, and performance relative to the organization. This helps identify areas
where the organization may have a competitive advantage or face significant
threats.
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Strategic Advantage Profile (SAP)
3. Internal Analysis: In addition to understanding the external environment, the
organization must also evaluate its internal capabilities and resources. This
includes assessing factors such as the organization's financial strength,
technological capabilities, brand reputation, operational efficiency, and human
capital. Internal analysis helps identify the organization's core competencies and
areas where it may need to improve to enhance its competitive position.
4. Strategic Dimensions: The Strategic Advantage Profile typically evaluates
competitiveness along several dimensions or factors that are critical for success in
the industry. These dimensions may vary depending on the specific industry and
context but commonly include factors such as product quality, innovation,
customer service, distribution channels, pricing, and marketing effectiveness. Each
dimension is assessed based on the organization's performance relative to
competitors, providing insights into areas of strength and weakness.
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Strategic Advantage Profile (SAP)
5. Competitive Positioning: Based on the analysis of industry dynamics, competitor
performance, and internal capabilities, the organization's competitive positioning is
determined. This involves identifying the organization's relative strengths and
weaknesses compared to competitors and assessing its overall competitive advantage
or disadvantage. Competitive positioning helps identify strategic opportunities and
threats and informs the development of strategies to enhance competitiveness.
6. Strategic Recommendations: Finally, based on the findings from the Strategic
Advantage Profile, strategic recommendations are developed to guide the
organization's future actions and initiatives. These recommendations may include
specific strategies to capitalize on competitive strengths, address weaknesses, exploit
market opportunities, and mitigate threats. Strategic recommendations should be
actionable, realistic, and aligned with the organization's overall strategic objectives.

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Apple Inc: SAP
1.Industry Analysis:
1. Apple operates primarily in the technology industry, specifically in the consumer electronics and
software sectors.
2. The industry is characterized by rapid technological advancements, intense competition, and
high levels of innovation.
2.Competitor Analysis:
1. Direct competitors include companies like Samsung, Google, Microsoft, and Huawei.
2. Apple faces competition in various product categories, including smartphones, tablets,
computers, wearables, and digital services.
3.Internal Analysis:
1. Apple's internal strengths include strong brand equity, a loyal customer base, innovative product
design, and a robust ecosystem of hardware, software, and services.
2. Key resources include its proprietary operating systems (iOS, macOS), design capabilities,
supply chain efficiency, retail stores, and strong financial performance.
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Apple Inc: SAP
3. Strategic Dimensions:
1. Product Differentiation: Apple emphasizes product design, user experience, and ecosystem integration to
differentiate its products from competitors.
2. Innovation: Apple invests heavily in research and development to drive innovation and introduce new
products and features.
3. Brand Image: Apple's brand is synonymous with quality, innovation, and premium pricing, contributing to
its competitive advantage.
4. Customer Experience: Apple focuses on delivering superior customer service, seamless user experience, and
strong customer loyalty.
4.Competitive Positioning:
1. Apple is positioned as a premium brand known for its innovative products, design excellence, and
customer-centric approach.
2. The company maintains a strong market position in key product categories such as smartphones (iPhone),
tablets (iPad), and wearables (Apple Watch).
3. Apple's ecosystem lock-in, including services like iCloud, App Store, Apple Music, and Apple TV+,
enhances customer retention and revenue growth.
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Apple Inc: SAP
1.Strategic Recommendations:
1. Continue to invest in innovation to maintain product differentiation and stay ahead of competitors.
2. Strengthen customer relationships through personalized experiences, services, and loyalty programs.
3. Expand into new markets or product categories while leveraging existing strengths and capabilities.
4. Enhance ecosystem integration and interoperability to create more value for customers and drive
ecosystem lock-in.
5. Focus on sustainability and corporate social responsibility initiatives to enhance brand reputation and
customer loyalty.
• Overall, Apple's Strategic Advantage Profile highlights its strong brand, innovation
prowess, ecosystem integration, and customer-centric approach as key drivers of its
competitive advantage in the technology industry. By leveraging these strengths and
addressing potential weaknesses, Apple aims to sustain its leadership position and drive
long-term growth and profitability.

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Using SWOT to Generate Strategy

• How can we use each strengh

• How can we improve on each weaknesses
• How can we exploit each opportunities
• How can we mitigate each threats

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SWOT Analysis of Starbucks:
• Strengths (S):
• Strong Brand Image: Starbucks has built a powerful brand known for its
quality coffee, premium experience, and customer loyalty.
• Extensive Global Presence: The company operates over 30,000 stores in
more than 80 countries, providing a broad market reach and scale.
• Product Innovation: Starbucks continually introduces new products, such as
seasonal beverages, food items, and merchandise, to meet changing
consumer preferences.
• Customer Experience: Starbucks offers a unique customer experience,
characterized by cozy ambiance, friendly service, and personalized
interactions.
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SWOT Analysis of Starbucks:
• Weaknesses (W):
• High Dependence on Coffee: Starbucks' business model is heavily
reliant on coffee-related products, making it vulnerable to fluctuations
in coffee prices and consumer demand.
• Premium Pricing: Starbucks' premium pricing strategy may limit its
appeal to price-sensitive customers, particularly in competitive
markets.
• Overreliance on U.S. Market: A significant portion of Starbucks'
revenue comes from the U.S., exposing the company to risks
associated with economic downturns or market saturation.
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SWOT Analysis of Starbucks:
1.Opportunities (O):
1. Expansion in Emerging Markets: Starbucks has opportunities to expand its presence in emerging
markets such as China, India, and other parts of Asia-Pacific, where coffee consumption is
growing.
2. Product Diversification: Starbucks can explore diversification into new product categories, such as
ready-to-drink beverages, packaged goods, and digital offerings, to drive revenue growth.
3. Digital Innovation: Starbucks can leverage technology and digital platforms to enhance customer
engagement, loyalty programs, and mobile ordering capabilities.
2.Threats (T):
1. Intense Competition: Starbucks faces intense competition from both large coffeehouse chains
(e.g., Dunkin', Costa Coffee) and smaller independent cafes.
2. Changing Consumer Preferences: Shifts in consumer preferences towards healthier options,
sustainability, and convenience may impact Starbucks' product offerings and sales.
3. Economic Uncertainty: Economic downturns, fluctuations in exchange rates, and geopolitical
tensions pose risks to Starbucks' global operations and financial performance.
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SWOT Analysis of Starbucks:
1. Leverage Brand Strength and Global Presence (S, O):
1. Expand into emerging markets like China and India by opening new stores and adapting products to local tastes and preferences.
2. Enhance the customer experience through store renovations, digital ordering options, and personalized marketing campaigns to
drive loyalty and repeat business.
2. Diversify Product Offerings (W, O):
1. Introduce new product categories such as plant-based alternatives, healthy snacks, and premium beverages to appeal to a broader
customer base and reduce dependence on coffee sales.
2. Invest in digital innovation and mobile ordering platforms to improve convenience and accessibility for customers while capturing
valuable consumer data for personalized marketing efforts.
3. Mitigate Competitive Threats (S, T):
1. Differentiate Starbucks' offerings through product innovation, quality assurance, and sustainable sourcing practices to maintain a
competitive edge in the crowded coffee market.
2. Continuously monitor market trends and consumer preferences to adapt product offerings and marketing strategies in response to
evolving competitive dynamics.
4. Manage Economic Risks (W, T):
1. Implement cost-saving measures, supply chain optimization, and pricing strategies to mitigate the impact of economic uncertainty,
commodity price fluctuations, and currency risks.
2. Diversify revenue streams and geographic presence to reduce reliance on any single market or region and enhance resilience to
macroeconomic challenges.
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Quantify the SAP Of A Company
• To quantify the Strategic Advantage Profile (SAP) of a company and compare it with competitors, we'll assign
numerical values to the degree of strength and weakness for each factor, multiply it by the impact factor, and
then compare the resulting scores. Let's break down the process:
1. Assign Numerical Values:
1. For each Organizational Capability Factor (OCF), we'll assign a numerical value on a scale of 1 to 10 to represent the degree
of strength or weakness. A higher number indicates greater strength, while a lower number indicates greater weakness.
2. Additionally, we'll assign an impact factor on a scale of 1 to 5 to represent the relative importance or impact of each factor on
the organization's overall strategic advantage. A higher number indicates a higher impact on strategic advantage.
2. Calculate SAP Score:
1. Multiply the degree of strength or weakness by the impact factor for each OCF to calculate its SAP score.
2. The SAP score for each factor will provide a quantitative measure of its contribution to the organization's overall strategic
advantage.
3. Comparison with Competitors:
1. Repeat the same process for competitors to calculate their SAP scores.
2. Compare the SAP scores of the company and its competitors to identify areas of relative strength and weakness and assess
competitive positioning.

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Illustration of RetailCo
• Organizational Capability Factors (OCFs):
• Human Capital
• Brand Reputation
• Product Innovation
• Supply Chain Efficiency
• Degree of Strength/Weakness (1-10 scale):
• Human Capital: Strength (8)
• Brand Reputation: Strength (9)
• Product Innovation: Weakness (4)
• Supply Chain Efficiency: Strength (7)
• Impact Factor (1-5 scale):
• Human Capital: 4
• Brand Reputation: 5
• Product Innovation: 3
• Supply Chain Efficiency: 4
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Illustration of RetailCo
• SAP Score Calculation:
• Human Capital: 8 (Strength) * 4 (Impact) = 32
• Brand Reputation: 9 (Strength) * 5 (Impact) = 45
• Product Innovation: 4 (Weakness) * 3 (Impact) = 12
• Supply Chain Efficiency: 7 (Strength) * 4 (Impact) = 28
• Total SAP Score for XYZ Retail: 32 + 45 + 12 + 28 = 117

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Illustration of RetailCo’s Competitor
SuperStore
• Organizational Capability Factors (OCFs):
• Human Capital
• Brand Reputation
• Product Innovation
• Supply Chain Efficiency
• Degree of Strength/Weakness (1-10 scale):
• Human Capital: Strength (7)
• Brand Reputation: Weakness (3)
• Product Innovation: Strength (6)
• Supply Chain Efficiency: Weakness (4)
• Impact Factor (1-5 scale):
• Human Capital: 4
• Brand Reputation: 3
• Product Innovation: 4
• Supply Chain Efficiency: 3
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Illustration of RetailCo’s Competitor
SuperStore
• SuperStore
• SAP Score Calculation:
• Human Capital: 7 (Strength) * 4 (Impact) = 28
• Brand Reputation: 3 (Weakness) * 3 (Impact) = 9
• Product Innovation: 6 (Strength) * 4 (Impact) = 24
• Supply Chain Efficiency: 4 (Weakness) * 3 (Impact) = 12
• Total SAP Score for ABC Superstores: 28 + 9 + 24 + 12 = 73
• Comparison with XYZ Retail:
• Total SAP Score for RetailCo: 117
• Total SAP Score for Superstores: 73
• In this comparison, RetailCo has a higher Total SAP score (117) compared to ABC Superstores
(73). This suggests that RetailCo may have a stronger overall strategic advantage relative to
Superstores, based on the assessed Organizational Capability Factors and their respective
strengths, weaknesses, and impacts.
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