( 一 ) Internal Analysis

( 一 ) Internal Analysis
 Internal Analysis
 Pinpoints the strengths and weaknesses of the organization.
 Strengths and Weaknesses ：
 Gives managers the information to choose the strategies and
business model to attain a sustained competitive advantage.

Strengths Weaknesses
Assets that Liabilities that
boost depress
profitability profitability
( 二 ) Competitive Advantage
( 二 ) Competitive Advantage
 Strategy, Resources, Capabilities, and Competencies
( 二 ) Competitive Advantage
 Value Creation Per Unit
( 二 ) Competitive Advantage
 Value Creation and Pricing Options
( 二 ) Competitive Advantage
 Comparing Toyota and General Motors

• Superior value creation requires the gap between perceived utility (U)
and costs of production (C) be greater than attained by competitors.
( 二 ) Competitive Advantage
( 三 ) The Value
Chain
( 三 ) The Value Chain
 The Value Chain
 Company is a chain of activities for transforming inputs into outputs
customers value.
 The value chain activities include primary & support activities:
( 三 ) The Value Chain
 Value Chain Activities
Primary Activities
 R & D = design and
production
 Production = creation of
good/service
 Marketing = brand
positioning & advertising
 Customer Service = after-
sales service & support
Support Activities
 Materials Mgmt. =
transmission of materials
 HR = ensures right mix of
skilled people
 I. S. = managing, tracking
 Infrastructure = context in
which all other activities
take place
( 四 ) The Building Blocks of
Competitive Advantage
( 四 ) The Building Blocks of Competitive Advantage

 Building Blocks
 Efficiency:
 Fewer inputs to produce given output
 Efficiency = Outputs / Inputs
 Quality:
 Customers perceive product’s attributes provide higher utility in excellence &
reliability
 Innovation:
 Product
 Process
 Biz Model
 Customer Responsiveness:
 Customers attribute more utility by creating differentiation with competitive
advantage
( 四 ) The Building Blocks of Competitive Advantage

 Quality Map for Automobiles

Attributes of Quality:
1. Excellence
2. Reliability
( 五 ) Analyzing Competitive Advantage
and Profitability
( 五 ) Analyzing Competitive Advantage
and Profitability
 Drivers of Profitability (ROIC)
( 五 ) Analyzing Competitive Advantage
and Profitability