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BUSINESS STATEGY VI ORG APPSL

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BUSINESS STATEGY VI ORG APPSL Powered By Docstoc
					BUSINESS STATEGY
       VI
  Organisational Appraisal
  Methods & Techniques
      INTERNAL ANALYSIS
 VRIO  Framework
 Value Chain Analysis
 Quantitative Analysis- financial & non-
  financial
 Qualitative Analysis
    INTERNAL ANALYSIS (CONTD)
 VRIO Framework- this consists of classifying the
  capabilities of an organisation in terms of:
  valuable, rare, inimitable, organised for usage
 Valuable- are those capabilities which help an
  organisation in generating revenues by
  capitalising on opportunities and /or to reduce
  costs by neutralising the threats- examples:
  amicable relationship with government, quality
  after sales service
    INTERNAL ANALYSIS (CONTD)
 Rare- are those capabilities which the firm
  uniquely has or only a few other organisations-
  examples: a highly satisfied and committed
  workforce, exclusive location, a specific
  technology
 Inimitable- capabilities which are very difficult,
  impossible or not worthwhile to
  duplicate/substitute-examples: a Favourable
  corporate image, ability to acquire and integrate
  new businesses
 INTERNAL ANALYSIS (CONTD)
 Organised for usage- those Capabilities
 which are readily available for usage –
 examples: a competent R&D team, a
 Market Research Group, business
 partners who are ready to integrate their IT
 systems with the firm in question
    VALUE CHAIN ANALYSIS
 Primary Activities: Inbound Logistics,
  Operations, Outbound Logistics, Marketing &
  Sales, Service
 Support Activities: Firm Infrastructure which
  comprises accounting, finance, planning,
  general management, management of
  government relations, HRM, Technology
  Development, Procurement
 Net result is the MARGIN
    QUANTITATIVE ANALYSIS
 Financial: classical ratio analyses, modern tools
  like the EVA (computed by finding the difference
  between the after-sales profit and the cost of
  capital), Activity-based Costing ( Computed
  through the costs incurred in the major activities
  in the value chain and keeping tab on them)
 Non-financial: employee turnover, absenteeism,
  market ranking, rate of advertising recall, total
  production cycle time, inventory per period,
  service call rate, number of patents registered
  per period
    QUALITATIVE ANALYSIS
 Quantification  has limitations
 May strengths and weaknesses of an
  organisation cannot be quantified like the
  culture of the place, ability to absorb and
  assimilate knowledge- so is the case of
  environmental factors
 Quantitative and qualitative have to
  complement each other
    COMPARATIVE ANALYSIS
 Historical Analysis- both a long view into the
  past and a comparison with similar periods a
  year or two ago. The former sums up how the
  organisation has faced the challenges in the
  past and the latter the incremental improvemen
  or its absence
 Industry Norms- the Industry to which the
  business belongs provide the right context for
  comparison unlike comparing oranges and
  bicycles, these norms need to be excelled
         BENCHMARKING
 Performance   Benchmarking
 Process Benchmarking about methods &
  practices
 Strategic Benchmarking- how long term
  significant decisions and actions are taken
 Internal Benchmarking between units and
  branches of the same organisation
 Competitive Benchmarking- direct
  comparison with one’s best rivals
  BENCHMARKING (CONTD)
 Functional  Benchmarking-is the
  comparison of processes and functions of
  non-competitive organisations in the sae
  sector or technological group
 Generic Benchmarking- comparison with
  the best processes and practices
  anywhere in any industry
COMPREHENSIVE ANALYSIS
 Key Factor Rating- many systems have been
  evolved by consultants to assess organisational
  strengths and weaknesses- through searching
  questions in each capability area
 In Finance Capability are questions like what the
  capital structure of the company like, its ability to
  raise capital in the market, who the effective
  controllers are, its debt: equity ratio, reserves
  and surplus position etc.
 KEY FACTOR RATING (CONTD)
 Finance  Capability- investment
  opportunities dividend policy in
  comparison,
 Marketing Capability-range and variety of
  products, its reflection or lack of it of the
  market requirements, the BCG Matrix,
  pricing policy and prices, promotional tools
  and methodologies, market standing and
  image
 KEY FACTOR RATING (CONTD)
 Operations  Capability-
 advantages/disadvantages of the plant
 location, the layout, plant capacity, the
 degree of IT enabling, responsivenes to
 short term demands, supply of materials,
 the supply chain management, R&D
 facilities and resources including the level
 of expertise, access to the latest
 technologies
 FEY FACTOR RATING (CONTD)
 HR  Capability- various personnel systems
 or their absence, the status of the HR
 Department, its image as Employer,
 uniqueness of ts manpower at all levels,
 the IR scenario
 KEY FACTOR RATING (CONTD)
 ITCapability- quality, amount and
 timeliness of information, sources, security
 of its information systems, processing and
 integration of information received,
 retrieval, usage and dissemination of
 information,
 KEY FACTOR RATING (CONTD)
 General  Management Capability- vision,
 mission, goals, strategies- their status, the
 processes of strategy formulation, the
 strategic orientation of the top
 management, relationship with financial
 institutions, government etc.organisational
 climate

				
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