CHAPTER 4 : EVALUATING A COMPANY’S RESOURCES, CAPABILITIES, AND COMPETITIVENESS

    The three best indicators of how well a company’s  strategy is working are :

                                i.            Whether the company is achieving its stated a financial and strategic objectives

                              ii.            Whether its financial performance is above the industry average.

                            iii.            Whether its gaining customers and increasing market share.

    Do the company’s resources and capabilities have sufficient competitive power to give it a suitanable advantage over competitors?

Ø By conduct the 4 test of a resources’s competitive power – the VRIN test.

Ø The firm have a competitive advantages over market rivals when its has resources and capabilities that are competitively valuable and rare.

    How the company be able to seize market oppurtunities and overcome the external threats to its future well-being ?

Ø By perform a SWOT analysis . SWOT analysis have two most important part which is : 1) drawing conclusion about strengths, weakness, oppurtunities and threats. 2) acting on conclusion to better match the company.s strategy to its internal strengths and market oppurtunities, to correct the important internal weakness, and to defend against external threats.

    The higher company’s costs the above those of close rivals, the more competitively vulnareable it becomes.

    The greater the amount of customer value that a company can offer profitability relative to close rivals, the less competitively vulnerable it becomes.

    A company value chain identifies the primary activities and related support activities that create customer value.

    A company’s costs competitiveness depends not only on the costs of internally performed activities but also on costs in the value chains of its suppliers and distribution channel allies

    Benchmarking is a potent tool for improving a company’s own internal activities that is based on learning how other companies perform them and borrowing their ‘ best practices ‘

    Benchmarking also the costs of companies activities against rivals provides hard avidence of whether a company is cost competitive.

    Performing   value-chain activities with capabilities that permit the company to either outmatch rivals on differentiation or beat them on costs will give the company a competitive advantages.

    Height-weighted competitive strength ratings signal  a strong competitive position and possession of competitive advantages; low ratings signal a weak position and competitive disadvantages.

    A company competitive strength scores pinpoint its strengths and weakness against rivals and point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive vulnerabilities

    Zeroing in on the strategic issues a company faces and compiling a list of problems and roadblocks creates a strategic agenda of problems that merit prompt managerial attention.

    A good strategies must contain way to deal  with all the strategic issues and obstacles that stand in the way of the company’s financial and competitive success in the years ahead.