Components Of An Internal Analysis

An internal analysis’ purpose is very similar to that of an external analysis. Both are essentially developed to assist an organization build a successful strategy. Where they differ is that the external analysis focuses on the influential external elements; an internal analysis focuses on the internal forces. An internal analysis can unquestionably assist an organization drive up the profits aligning with internal matters. First, it is important to recognize what an internal analysis entails. In the course of this paper we will be looking into the key components that comprise this analysis. These components are StilSim’s value-chain, resources, core competencies, stakeholders, and finally their mission and vision.

Based on this week’s reading, core capabilities or competencies are defined as the main strength of organization based on their specific knowledge sets, skills, and technical capacities that render organizations competitive advantage in the industry (Bateman and Snell, 2014). When organizations are rooted in well-established core competencies, it would be difficult for competitors to imitate their competitive advantage.

In order to create individual competitive advantage each firm has to develop distinctive competencies, decide on one of the generic strategies and create superior value for its customers. The model of competitive advantage of firms was first established in 1985 by M.E. Porter in his study/book “Competitive Advantage:

Within the industry of plastic surgery the total revenue is currently around 13.5 billion dollars and still growing at an annual growth rate of 2.3 percent. The growth rate is expected to rise to around 5.5% in the next five years according to Ibisworld.com. In 2012, the industry reported around 12 billion dollars of revenue for both surgical and non-surgical procedures, which indicated a 12 percent overall increase in procedures according to surgery.org. The top five surgical procedures over the most recent year were injectables, laser hair removal, chemical peels, breast augmentations and reductions, and microdermabrasion. In 2012 the top five procedures were liposuction,

Resources are defined by Hitt, Ireland and Hoskisson in the book, Strategic Management, as “Broad in scope and cover a spectrum of individual, social, and organizational phenomena” (2013). However, a company cannot be successful with resources alone. “Resources do not allow firms to create value for customers as the foundation for earning above-average returns” (Hitt, Ireland & Hoskisson, 2013). All companies have both tangible and intangible resources. Tangible resources are “assets that can be observed or quantified” (Hitt, et. al., 2013). They are basically

A different perspective of approaching competitive advantage is its relationship with different business models, the degree of innovation and the information systems present. A competitive advantage is imminent if the current strategy of a company is value adding and is not now being implemented by its would-be competitors. The sustainability of a competitive advantage is rather difficult and although a competitive advantage can be sustained it has been recorded that this is not always the case. A fellow competing company can equally penetrate the market and invalidate the initial’s firm competitive advantage. In this instance, we do see that sustainability in the context of sustainable competitive advantage is not reliant on the time. A competitive advantage in this instance is only sustainable when the efforts by fellow competitors to vanquish the company's competitive advantage have ceased. When

The firm’s sources of sustainable competitive advantage are (1) its ability to recruit and retain the best talent, (2) its ability to add value to that talent while with the firm, and (3) its ability to develop and maintain relationships with top industry executives.

A company or an organization can create competitive advantage only when it is able to distinguish itself from the rivals by implementing a value creating strategy over a longer period of time. It is said to have a sustainable competitive advantage when other rival firms are unable to duplicate the value creating strategy of the firm which has led to the achievement

Several companies strive for a competitive advantage, but very few understand what it is, how to achieve it and how to actually sustain it.

The intangible resources are the one which cannot be seen or felt but play a major role in the business like the brand value, Leadership style, Human resource etc.

One of the greatest artist Pablo Picasso once said, “Action is the foundational key to success”. Well, we all agree with this quote, but there are many variety of factors that also implies in aspect of life. In the field of business, one of the key elements that ultimately controls the destiny of an organization, is their competitive advantage in a particular industry. The competitive advantage is defined as “an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices”("Competitive Advantage | Business."). In order to deeper understand of competitive advantage in a firm, I chose to read the book “Competitive Advantage Creating And Sustaining Superior Performance” by Michael E. Porter. He is an economist, researcher, author and professor at Harvard Business School most of his career. His extensive researches and wrote many books about economic theory as well as strategy concepts that made him widely recognized in economics and field of business.

Competitive Advantage may be defined as the benefit to company or organisation due to its products, good quality or low prices which distinguishes the company or organisation in Market and results in Increase sale and Good reputation. In Today’s time, to do a business in Market is not a piece of cake. The businessman needs to face a lot number of challenges to stay in market and do well in business. They need to complete their Goals and Objectives on Time and make a right decision at right time and at right palace. To struggle the challenges that comes on their way they need to execute certain strategies like-:

Developing competitive advantage has three key core components (Winer, 2004). According to Winer (2004), the first component is that “competitive advantage must be able to produce customer value, which is defined by the consumer as lower prices, convenience, or quick delivery time”. The second core component is the enhanced value of the product or service provided as perceived by a consumer. Whether or not your product is superior, it must be seen as such by the consumer. Finally, the third component to competitive advantage requires that the business approach an entrepreneur uses should be difficult for competitors to duplicate.

Chapter Four discusses the techniques of evaluating a company’s internal situation, including its collection of valuable resources and capabilities, its relative cost position, and its competitive strength versus its rivals. The analytical spotlight will be trained on five questions: (1) How well is the company’s present strategy working? (2) What are the company’s competitively important resources and capabilities? (3) Are the company’s prices and costs competitive? (4) Is the company competitively stronger or weaker than key rivals? (5) What strategic

According to them, the profit-maximizing and competition-based theory focuses on the notion that the central objective of business organization is to exploit long term profit and develop sustainable competitive advantage over rivals in the external business environment. Correspondingly, the industrial-organization posits that the state or position of an organization within the external business environment is very essential for attaining and sustaining competitive advantage, which relates to the theoretical stance of the traditional industrial-organizational theorist who perceived strategic management as a systematic model for assessing competition within an industry (Porter, 1981). On the other hand, the resource-based theory which materializes from the belief that the basis of organizations competitive advantage is inherent in the internal resources, as opposed to their positioning in the external environment. That is rather than simply evaluating environmental opportunities and threats in conducting business, competitive advantage depends on the unique resources and capabilities that a firm possesses (Barney,