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Strategic management- analysing a company's resources and copetitive position

Strategic management- analysing a company's resources and copetitive position

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Published by Mangan
mba vtu 3rd sem notes 4th module
mba vtu 3rd sem notes 4th module

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Published by: Mangan on Dec 14, 2009
Copyright:Attribution Non-commercial

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07/23/2014

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Analyzing a company's resources and competitiveposition
How well is the company's present strategy working?
It is very important to study the company's competitiveapproach to understand the working of the company's presentstrategy.
We need to study
 –
if the company is striving to be low-cost leader or stressing todifferentiate its products.
 –
is it concentrating on serving a broad spectrum of customers or anarrow niche market.
 –
what is its geographical coverage.
 –
is it operational in just a single stage of industry'sproduction/distribution system or is vertically integrated acrossseveral stages.
 –
the latest moves to improve competitive position and performance.
 –
what are the functional strategies in R&D, production and otherdepartments.
 
 The two best quantitative indicators of theperformance of present strategy are:1.whether the company's is achieving its statedfinancial and strategic objectives2.whether the company is an above-averageindustry performer.
Failure on these two fronts indicate either poorstrategy making or less than competent strategyexecution or both.Other indicators of how well a company's strategy isworking include:
1.Whether the firm's sales are growing faster, slower orabout the same pace as the market as a whole, thusresulting in a rising, eroding or stable market share.
 
2. Whether the company is acquiring new customers at an attractive rateas well as retaining existing customers.3. Whether the firm's profit margins are increasing or decreasing andhow well its margins compare to rival firms' margins.4. Trends in the firm's net profits and returns on investment and howthese compare to the same trends for other companies in the industry.5. Whether the company's overall financial strength and credit rating areimproving or on the decline.6. Whether the company can demonstrate continuous improvement insuch internal performance measures as days of inventory, employeeproductivity, unit cost, defect rate, scrap rate, delivery time, warrantycosts.7. How shareholders view the company based on trends in thecompany's stock price and shareholder value, relative to stock pricesof other companies in the industry.8. The firm's image and reputation with its customers.9. How well the company stacks up against rivals on technology, productinnovation, customer service, product quality, delivery time, price,getting newly developed products to market quickly and other factorson which the buyers base their choice of brands.

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