Presentation

strategic management
internal assesment
Student Names
 Mustafe Jama Yusuf 2932
 Mowliid Muse Abdirahman 2798
 Fatimo Mohamed Isse 2486
 Maryam Ahmed Mohamed 2553
 Said Salad Omar 2516
 Samira Abdikadir Barre 2804
 Abdisalam Mohamed Muse 2471
Outline
 The nature of an internal Audit
 The resource based veiw ( RBV )
 Management
 Marketing
 Finance/Accounting
 Production/Operations
 Research and development
Mowliid Muse Abdirahman
Internal Assessment
 internal assessment will highlight an organizatio
n's strengths and weaknesses in the areas of their
competencies, resources, and competitive advant
age.
 the organization should have a clear idea of wher
e they're excelling, where they're doing OK and w
here current deficits and gaps lie. The analysis wil
l arm management with the knowledge to exploit
their strengths and opportunities. It also allows m
anagement to develop strategies to mitigate any t
hreats and compensate for identified weaknesses.
Nature of internal Audit

Functional areas of business:-

* Strength
* Weakness
Internal Environment Factors
 The internal factors refer to anything within the
company and under the control of the company
no matter whether they are tangible or intangibl
e. These factors after being figured out are grou
ped into the strengths and weaknesses of the co
mpany. If one element brings positive effects to
the company, it is considered as strength.
 On the other hand, if a factor prevents the devel

opment of the company, it is a weakness. Within

the company, there are numerous criteria need t
o be taken into consideration.
Cont...
Internal environment types
 Plans & Policies , Human Resource, Financial and
Marketing Resources, Corporate Image and brand
equity, Plant/Machinery/Equipments (or you can
say Physical assets), Labour Management, Inter-p
ersonal Relationship with employees, Internal Tec
hnology Resources & Dependencies, Organization
al structure or in some cases Code of Conduct, Q
uality and size of Infrastructure, Task Executions
or Operations,Financial Forecast,The founders rel
ationship and their decision making power.
Cont....
Key internal forces:-
1. A firm’s strengths that cannot be easily matc
hed or imitated by competitors are called distinc
tive competencies. Building competitive advanta
ges involves taking advantage of distinctive com
petencies.
2. Strategies are designed in part to improve on
a firm’s weaknesses, turning them into strength
s, and maybe even into distinctive competencies
.
Cont...
Parallels process of external audit
Information from:
 Management
 Marketing
 Finance/accounting
 Production/operations
 Research & development
 Management information systems
Mustafe Jama Yusuf
Resource Based View (RBV)
Internal resources come from three ca
tegories:-

 Physical resources: plant, equipment, location, te

chnology, raw materials, machines, etc.
 Human resources: employees, training, experie
nce, intelligence, knowledge, skills, abilities, etc.
 Organizational resources: firm structure, planni
ng processes, information systems, patents, trad
emarks, copyrights, databases, etc.
Cont....
The basic principles
 The mix, type, amount, and nature of a firm’s
internal resources should be considered first
and foremost in devising strategies that can l
ead to sustainable competitive advantage.
 Firms should pursue strategies that are not c

urrently being implemented by any competin

g firm.
Cont...
Evaluation key resources:-
VRIO framework
 How to identify the key resources? Base on four
criteria:
1) Value: Does it provide competitive advantage?
2) Rareness: Do other competitors possess it?
3) Imitability: Is it costly for others to imitate?
4) Organization: Is the firm organized to exploit t
he resource?
Maryam Ahmed Mohamed
Management
Functions of Management:-
 Planning
 Organizing
 Motivating
 Staffing
 Controlling
Cont...
Cont...

Planning
 Beginning of management process
 Bridge between present & future
 Improves likelihood of attaining desired res

ults
Cont....

Organizing
 Achieves coordinated effort
 Defines task & authority relationships
 Departmentalization
 Delegation of authority
Cont......

Motivating
 Influencing to accomplish specific objective
s
 Communication – major component
Cont...

Staffing

 Personnel management
 Human resource management
Cont...

Controlling
 Establishing performance standards
 Ensure actual operations conform to planne

d operations
 Taking corrective actions
Abdisalam Mohamed Muse
Marketing

 Marketing can be described as the process

of defining, anticipating, creating, and fulfil
ling customers’ needs and wants for produc
ts and services.
Cont....
Marketing functions:-
 Customer analysis
 Selling products/services
 Product & service planning
 Pricing
 Distribution
 Marketing research
 Opportunity analysis
Samira Abdikadir Barre
Finance/Accounting

 Determiningfinancial strengths &

weaknesses key to strategy format
ion
Cont....
Importance of Finance and Accountin
g:-

1. Financial condition is often considered the singl

e best measure of a firm’s competitive position an
d overall attractiveness to investors. Determining a
n organization’s financial strengths and weaknesse
s is essential to formulating strategies effectively.
2. A firm’s liquidity, leverage, working capital, prof
itability, asset utilization, cash flow, and equity can
eliminate some strategies as being feasible alternat
ives.
Cont...
Finance/accounting functions:-
 According to James Van Horne, the functions
of finance/accounting comprise three decisio
ns:
1) Investment decision (Capital budgeting)
2) Financing decision
3) Dividend decision
Investment decision
 The allocation and reallocation of capital and
resources to projects, products, assets, and d
ivisions of the organization.
 Also known as capital budgeting
 Required to successfully implement strategies
Financing decision
 Determines the best capital structure for the
firm and includes examining various methods
by which the firm can raise capital.
 Must consider both short-term and long- ter

m needs for working capital

Dividend decision
 Concern issues such as the percentage of ear
nings paid to stockholders, the stability of div
idends paid over time ,and the purchase of st
ock.
 Determine the amount of funds that are retai

ned in a firm compared to the amount paid o

ut to stockholders.
Said Salad Omar
Production and Operations
1. The production/operations functions of a bu
siness consist of all those activities that transfor
m inputs into goods and services.
2. Production/operations management deals wit
h inputs, transformations, and outputs that vary
across industries and markets.
3. The production/operations activities often re
present the largest part of an organization’s hu
man and capital assets.
Cont...

Production/Operations Functions:-
 Process
 Capacity
 Inventory
 Workforce
 Quality
Cont...
Cont...
Cont...
Cont...
Cont...
Fatimo Mohamed Isse
Research & Development
 Many firms today do not conduct R&D, and ye
t many other companies depend on successfu
l R&D activities for survival. Firms pursuing a
product development strategy especially need
to have a strong R&D orientation.
Cont...
R&D in organizations can take two basic forms:

 (1) internal R&D, in which an organization operates its

own R&D department, and/or
 (2) contract R&D, in which a firm hires independent re

searchers or independent agencies to develop specific

products.
 Many companies use both approaches to develop new

products.
 A widely used approach for obtaining outside R&D as

sistance is to pursue a joint venture with another firm.

Cont...
 Most firms have no choice but to continually
develop new and improved products because
of changing consumer needs and tastes, new
technologies, shortened product life cycles, a
nd increased domestic and foreign competitio
n.
Cont...
Research and development functions:-

 Development of new products before competi

tors
 Improving product quality
 Improving manufacturing processes to reduce

costs
END