chapter 4: EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, AND COMPETITIVENESS

Hye readers! Are you waiting for my next entry? hehe. In this entry I will share to you about EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, AND COMPETITIVENESS. In this chapter, we can Learn how to assess how well a company’s strategy is working. We can also understand why a company’s resources and capabilities are central to its strategic approach and how to evaluate their potential for giving the company a competitive edge over rivals.

QUESTION 1: HOW WELL IS THE FIRM’S PRESENT STRATEGY WORKING?

  Best indicators of a well-conceived,
well-executed strategy:

●The firm is achieving its stated financial and strategic objectives.

●The firm is an above-average industry performer.

QUESTION 2: WHAT ARE THE FIRM’S COMPETITIVELY IMPORTANT RESOURCES AND CAPABILITIES?

♦A resource is a competitive asset that is owned or controlled by a firm

♦A capability or competence is the capacity of a firm to perform and internal activity competently through deployment of a firm’s resources.

♦A firm’s resources and capabilities represent its competitive assets and are big determinants of its competitiveness and ability
to succeed in the marketplace.

QUESTION 3: IS THE COMPANY ABLE TO SEIZE MARKET OPPORTUNITIES AND NULLIFY EXTERNAL THREATS?

For this part, we can determine it by using SWOT ANALYSIS. Why? Here is the reasons why:

●Is a powerful tool for sizing up a firm’s:

vInternal strengths (the basis for strategy)

vInternal weaknesses (deficient capabilities)

vMarket opportunities (strategic objectives)

vExternal threats (strategic defenses)

That's all i can share to you about this chapter. Hope you enjoy!

chapter 3: EVALUATING A COMPANY’S EXTERNAL ENVIRONMENT

This entry will show you about EVALUATING A COMPANY’S EXTERNAL ENVIRONMENT. This topic describes about the PESTEL and the Porter's Five - Forces .

What is PESTEL? What is Porter's Five - Forces? Read further and i'll show you my dear ;)

The macro-environment encompasses the broad environmental context in which a company’s industry is situated that includes strategically relevant components over which the firm has no direct control.

 PESTEL analysis focuses on the six principal components of strategic significance in the macro-environment:

PESTEL

Porter's Five - Forces

USING THE FIVE-FORCES MODEL OF COMPETITION

step 1: For each of the five forces, identify the different parties involved, and the specific factors that bring about competitive pressures.

step 2: Evaluate how strong the pressures stemming from each of the five forces are (strong, moderate, or weak).

step 3: Determine whether the collective strength of all five competitive forces is conducive to earning attractive profits in the industry.

Thus, now i can see how to evaluate a company's external environment. I'm pretty sure that you also can understand it. I can feel that this subject started to attract me. Many interesting things i learnt from it. Okay i feel sleepy right now. See you soon. goodnight love!