Internal Analysis

This course discusses the techniques of evaluating a company’s internal situation, including its collection of resources and capabilities, its cost structure and customer value proposition, and its competitive strength. 

The internal environment includes elements within the organization’s boundaries, such as employees, management, and corporate culture. The stronger a company’s current overall performance, the less likely the need for radical changes in strategy.

A resource is a competitive asset that is owned or controlled by a company. A capability is the capacity of a company to competently perform some internal activity. Capabilities are developed and enabled through the deployment of a company’s resources. A dynamic capability is the ability to modify, deepen, or reconfigure the company’s existing resources and capabilities in response to its changing environment or market opportunities.

A value proposition is an innovation, service, or feature intended to make a company or product attractive to customers. A company’s customer value proposition and cost competitiveness depend not only on internally performed activities (its own company value chain), but also on the value chain activities of its suppliers and forward channel allies.

Competitive advantage is the leverage that a business has over its competitors. A company’s competitive strength scores pinpoint its strengths and weaknesses against rivals and point to offensive and defensive strategies capable of producing first-rate results.

Strategic issues are found by pinpointing the precise things that management needs to worry about sets the agenda for deciding what actions to take next to improve the company’s performance and business outlook. Compiling a “worry list” of problems and issues creates an agenda for managerial strategy making.