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Internal Factor Analysis

Summary (IFAS)
Information Technology

November 18, 2013

Presented by
Nitin Khattri
Amit Kumar
Ashish Jha
Ameya V Lakhe
Manish Pandey

Agenda
Introduction to IFAS
VRIO Framework
IT Industry Overview
Dell Inc. IFAS
Apple Inc. IFAS

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Agenda
Introduction to IFAS
VRIO Framework
IT Industry Overview
Dell Inc. IFAS
Apple Inc. IFAS

3

Objectives    4 How can a firm identify its strengths and weaknesses? What are firm’s core competencies? Can you create a sustainable competitive advantage? .

Assess strengths and weakness:  Relative to competitors and  Important to customers. protect and deploy resources. .  understand capabilities and develop core competencies.Strengths and Weaknesses    5 Goal: Objective assessment of strengths and weaknesses to:  identify.

6. This tells how well the company is responding to the strategic factors in its external environment. .0 (Most Important) to 0. Use Column 5 (comments) for rationale used for each factor. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the company’s response to that factor.Internal Factor Analysis Summary (IFAS) Weighted Weight Internal Factors Strengths 1 Rating 2 Comments Score 3 4 5 Weaknesses Total Weighted Score 1. 5. Reprinted by permission. Source: T. Hunger.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. “External Strategic Factors Analysis Summary (EFAS).00 Notes: 1.” Copyright © 1991 by Wheelen and Hunger Associates. Add the weighted scores to obtain the total weighted score for the company in Column 4. L. 2. D. Weight each factor from 1. 4. List opportunities and threats (5–10 each) in column 1. 3. The total weights must sum to 1. Wheelen and J.00.

The Internal Environment Approaches to Organizational  Can use resource-based approach  Can use value chain analysis Analysis  7 Can use functional resource analysis .

IFAS Apple Inc.Agenda Introduction to IFAS VRIO Framework IT Industry Overview Dell Inc. IFAS 8 .

The Framework  FourVRIO Important Questions:     9 Is the resource Valuable? Is the resource Rare? Is the resource Imitable? Can the Organization make use of it? .

Applying the VRIO Framework 10 .

Resource Based View 11 .

given the relative strength and weakness of resources and capabilities  Manager’s Job:  Bundle resource and Capabilities to achieve competitive advantage VRIO Framework helps manager recognize sources of competitive advantage 12 .Internal Analysis  Tells us:  What the firms should do.

Apple 13 The Brand Yes Yes Yes Yes Supply Chain Management Top Executives Yes Yes Yes Yes Yes Yes Yes Yes International Product Distribution Yes No No Yes .Resource/ Capability Does it have Value? Is it Is it Is the company Rare? Inimitabl Organized to e? exploit this resource/capabil ity VRIO Analysis.

IFAS 14 . IFAS Apple Inc.Agenda Introduction to IFAS VRIO Framework IT Industry – An overview Dell Inc.

Indian IT Industry – An Overview 15 .

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Political opposition from developed countries. Still on the lower level of value chain.Indian IT Industry . Higher attrition rate. Weak domestic market.Weakness        19 Lower productivity levels. Cost of telecom and network infrastructure is much higher in India than in the west. . Local infrastructure.

IFAS Apple Inc.An Overview Dell Inc. IFAS 20 .Agenda Introduction to IFAS VRIO Framework IT Industry.

000 employees worldwide More than 3. Gale technology etc as step to become leader in server technology and data storage sphere. repairs and supports computers and related products and services. is an American multinational corporation headquartered in Round Rock. Credant Technologies.DELL INTRODUCTION      21 Dell Inc. that develops. Dell is 3rd Largest PC vendor and #1 shipper of PC monitors in world. . sells. Texas.000 patents across the world Acquired PerotSystems. More than 110.

00 Total Weighted Score Ratin g Weighted Score 3.80 .15 .75 .45 .15 3 3 .15 3 3 4 .Internal Factor Analysis Summary (IFAS): Dell Inc.45 .15 . Internal Factors Strengths • Product reliability and performance • Customized products where customers can decide the specifications they want on their products • Direct sales model which helps the company collect constant feedback • Competitive pricing Weaknesses • High dependence on PC products • No business diversification • Minimal investments in Research and Development Weight 1 2 3 4 .60 1.30 .30 .20 3 4 .10 .10 .15 .

Dell VRIO analysis Aspect Valu Rarity Imitabili e ty Organis ation Competiti ve Advantag e Pricing Yes No Yes Yes Parity Customizati on Yes Yes No Yes Sustained Marketing Yes No Yes Yes Temporary Direct Sales Yes No Yes Yes Parity .

An Overview Dell Inc.Agenda Introduction to IFAS VRIO Framework IT Industry. IFAS 24 . IFAS Apple Inc.

develops. California. and sells consumer electronics. is an American multinational corporation headquartered in Cupertino.. and the world's third-largest mobile phone maker after Samsung and Nokia .APPL INTRODUCTION 25  Apple Inc. Inc. that designs. formerly Apple Computer. computer software and personal computers  Apple is the world's second-largest information technolo gy company by revenue after Samsung Electronics.

the Safari web browser. revenues doubled every four months. and the iPad tablet computer . the iPhone smartphone. the iTunes media browser. and the iLife and iWork creativity and productivity suites.  Its best-known hardware products are the Mac line of computers.  During the first five years of operations. an average growth rate of 700%. the iPod music player.CONTINUE… 26  Its consumer software includes the OS X and iOS operating systems.

Apple surpassed Coca-Cola to become the world's most valuable brand in the Omnicom Group's "Best Global Brands" report . 2013.CONTINUE… 27  As of May 2013. with an estimated value of US$415 billion as of March 2013  On September 30. Apple maintains 408 retail stores in fourteen countries as well as the online Apple Store and iTunes Store. the latter of which is the world's largest music retailer.  Apple is the largest publicly traded corporation in the world by market capitalization.

. They are absolutely obsessed with the customer.21 0. 0.IFAS MATRIX Item Key internal factor Weig ht Ratin score g STRENGTH 1 Apple is the most customer-focused business.40 2 Customer loyalty that makes the customer price insensitive 0. 0.4 4 Existing products are of high quality while compared to competing products in the market .36 3 No debts means Apple can invest in other sectors 0.10 4 0.36 5 28 It has succeeded in building an image on providing good value .07 3 0.09 4 0.10 4 0.09 4 0.

09 4 0.IFAS MATRIX 29 Item Key internal factor 6 Strong brand that is quite popular among the Apple customers 7 Apple products are hard to imitate 8 Advance team consisting of executives in to conduct intelligence on potential competitors.21 0.40 0.36 .07 3 0.10 4 0. Weig ht Ratin g scor e 0.

24 WEAKNESS 1 2 30 Poor relations with other key players like Microsoft Apple is too much dependent on product launch 0.36 .08 3 0.18 4 Strong presence only limited to few countries 0.IFAS MATRIX Ite m Key internal factor Weig ht Ratin g scor e 0.07 2 0.10 Total 1 3.14 3 0.08 3 Apple emphasized its high-price private label ("Value") and continued to increase price 0.06 2 0.

Apple achieved an overall of 3. From here we can realize that the company is successful internally. 31 .36 total weighted score based on the 1-4 scale.CONCLUSION IFAS matrix shows the information related to strategy formulation.

Thank you 32 .