Internal

Environmental
Analysis and
Competitive
Advantage

CHAPTER 4
 Learning Objectives
• Understand the role of internal environmental analysis in
identifying the basis for sustained competitive advantage.
• Describe the organizational value chain, including the
components of the service delivery and support activities.
• Understand the ways in which value can be created at various
places in the organization with the aid of the value chain.
• Use the value chain to identify organizational strengths and
weaknesses.
• Determine the competitive relevance of each strength and
weakness with the aid of a series of carefully formulated
questions.
• Describe how competitively relevant strengths and weaknesses
can be used to suggest appropriate strategic actions.
 Identifying Competitive Advantage

• “What should the organization do?”

Situational analysis has concentrated on factors
in the external environment
• “What can the organization do?”
To develop a distinctiveness that competitors do
not have and cannot easily imitate requires a
shift in focus to the internal environment
Value Creation in Health Care
Organizations
Identifying Current and Potential
Competitive Advantage
COMPETITIVE RELEVANCE & POTENTIAL
OF THE STRENGTH
STRATEGIC THINKING MAP OF
COMPETITIVE ADVANTAGES RELATIVE
(STRENGTH)
STRATEGIC THINKING MAP OF
COMPETITIVE ADVANTAGES RELATIVE
(STRENGTH)
COMPETITIVE RELEVANCE & POTENTIAL OF
THE WEAKNESS
STRATEGIC THINKING MAP OF COMPETITIVE
ADVANTAGES RELATIVE (WEAKNESS)
STRATEGIC THINKING MAP OF COMPETITIVE
ADVANTAGES RELATIVE (WEAKNESS)
Step 1. Identifying Strengths and
Weaknesses
Step 2. Evaluating Competitive Relevance

• Question of Value. Is the resource, competency, or

capability of value to customers?
• Question of Rareness. Is this organization the only
one that possesses the resource, competency, or
capability or do many or all of its competitors possess
it?
• Question of Imitability. Is it easy or difficult to
duplicate the resource, competency, or capability?
• Question of Sustainability. Can the resource,
competency, or capability be maintained over time?
Step 3. Focusing on Competitive
Advantage
STRATEGIC IMPLICATIONS OF COMPETITIVELY
RELEVANT STRENGTH & WEAKNESS
 EVALUATING THE INTERNAL STRATEGIC
ASSUMPTIONS
 Have the strength & weakness been correctly identified?
 Is there a clear basis on which to compete?
 Does the strategy exploit the strength & avoid the major
weakness of the organization?
 Are the competitive advantages related to the critical success
factors in the service area?
 Have we prote3cted our short- & long term competitive
advantages?
 Has the competition made strategic moves that have weekend
our competitive advantages?
 Are we creating new competitive advantages?
THANKS!