Topic:Internal Strategic Analysis

From SharedExperienceProject

Contents 1 Topic Highlights 2 Introduction and Motivation 3 Learning Activities 4 Learning Objectives 5 Footnote

Topic Highlights

(What you will learn)

• The basics of conducting an internal strategic analysis, including how to evaluate a firm's internal capabilities
• The concept of a value chain and its importance in the strategic context
• The resource-based-view (RBV) of the firm and how the so-called VRIO framework can be used to assess the competitive potential of a resource or capability
• An introduction to how strategy might be derived from the internal analyses treated here^[1]

Introduction and Motivation

(Why learn it)

When we studied external strategic analysis, we saw how useful a framework can be because it encourages us to carry out an analysis in a systematic way rather than relying on intuition, e.g. as we often do when using tools like the basic SWOT analysis. In this topic, we are going to build on this idea by looking at some tools that allow us to do a solid analysis of the strengths and weaknesses of a given business (i.e. the SW half of SWOT).

This topic is usually treated over two sessions, as described below under Learning Objectives, and relies on an excellent textbook chapter by two of the strategists who pioneered the use of these concepts.

Learning Activities

(How the levels of understanding will be gained)

Learning activities for class 1

Type	Name	Direction
Reading	Read before class: Evaluating a Firm's Internal Capabilities (in your course package) This is a high-level introduction to the concepts of internal resources and capabilities, the Resource-Based View (RVB) and the Value, Rarity, Imitability and Organization (VRIO) Framework	Self-directed
In-class lecture	Internal Analysis Slides This discussion provides a brief introduction to the same concepts	Instructor-directed
Personal activities	Review the learning objectives given below in this page	Instructor and self-directed

Learning activities for class 2

Type	Name	Direction
In-class lecture and activities	TBA
Quiz	We will have an in-class quiz on these concepts: It will be based on one of the examples used in the reading, e.g. Electronic Arts, Dell, etc... Be sure to review the learning objectives given below in this page	Self-directed

Learning Objectives

(Levels of understanding to be gained)

Learning objectives for this topic

Level of Understanding	Objective(s)
Very best	After having carried out an internal analysis, can I write a clear succinct summary of the analysis, including conclusions the implications for the business strategy?
Highly satisfactory	Can I create a simple value chain for a general business case, i.e. for a business not studied in class? Can I identify the resources and capabilities for a business? Can I carry out a complete internal analysis for a situation not studied in class, e.g. using the value chain and VRIO tools? Do I know how the internal analysis relates to strategy?
Satisfactory	Do I know the basic steps for carrying out an internal analysis? Do I understand the role that an internal analysis plays in the development of a suitable strategy? How does it help? What are it's limitations? Do I understand how the concepts are applied in the examples used in the reading, e.g. Electronic Arts, Dell and others?
Maybe just enough to pass	Do I know the difference between resources and capabilities? Can I provide example of a firm's resources? Can I name the components of the VRIO framework, e.g. What do the letters V, R, I and O stand for and what do they mean? Do I know why we use the VRIO framework? Can I create a simplified value chain for a company?

Footnote

1. ↑ The topic of strategy development will be taken up in much more detail in a later topic.