CHAPTER 4 : Evaluating A Company's Resources, Capabilities and Competitiveness.

Salam everyone!

For this week we move to chapter 4, where we are trying to evaluate how well a company’s strategy is working in terms of their resources and capabilities. How? The best indicator is the firm is achieving its stated financial and strategic objectives.  Without these 2 things, a company may fall. Other than that, we can see a company is success if there are increasing profits margins, net profit, ROI, growth in firms sales and market share and etc. Next, they also have to give more attention in controlling the resources and capabilities of a firm to perform some activity because both of them is a powerful tools for sizing up a company’s competitive assets and determining if they can support a sustainable competitive advantage over market rivals.

Shabirah trying to explain something to shima.

Besides that, a company should make their SWOT analysis in order to grab the market opportunities and external threats. Swot analysis is very important as it is a powerful tool for sizing up a firm internal strength, internal weaknesses, market opportunities and external threats. From SWOT analysis, we can match its strategy to its internal strengths and to market opportunities and also correct important weaknesses and defend it against external threats.

 In addition, we grasp how a company’s value chain activities can affect the company’s cost structure and customer value proposition. Actually, a company’s value chain identifies the primary activities and related support activities that create customer value. Example of value chain analysis is facilitates a comparison, activity-by-activity and etc. The industry is focuses on the firm’s internal, industry suppliers and channel intermediaries. From my understanding, industry value chain gives effects to end consumers, industry sales volume and customer satisfaction.

Do you know what is benchmark? It involves improving a firm’s internal activities based on learning other companies’ “best practices.” This is done in order to assess whether the cost competitiveness and effectiveness of a firm’s value chain activities are in line with its competitors’ activities. A company can get the benchmarking information in several ways like getting data from consulting firms, visits the benchmark companies and etc.

Have a nice day!