SWOT Analysis and VRIO

SWOT Analysis

• $environmental scanning:$ monitoring of an organization’s internal and external environments to detect early signs of opportunities and threats that may influence the firm’s plans
• SWOT, process for scanning:
  • internal strengths: could be work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, and other internal matters
  • internal weaknesses: could be in the same categories as stated for strengths- work processes, organization, culture, etc.
  • external opportunities: could be market segment analysis, industry and competition analysis, impact of technology on organization, product analysis, governmental impacts, and other external matters
  • external threats: could be in the same categories as stated for opportunities: market segment analysis, etc.

Using VRIO to Analyze Competitive Potential

• $VRIO:$ framework for analyzing a resource or capability to determine its competitive strategic potential by answering 4 questions about its:
• Value
• Rarity
• Imitability
• Organization

Forecasting: Predicting the Future

• $forecasting:$ a vision or projection of the future
  • two types: trend analysis and contingency planning
• $trend analysis:$ hypothetical extension of a past series of events into the future
• $contingency planning:$ creation of alternative hypothetical but equally likely future conditions
  • aka scenario planning and scenario analysis

Benchmarking: Comparing With the Best

• $benchmarking:$ a process by which a company compares its performance with that of high-performing organizations

Porter’s 5 Competitive Forces

• Michael Porter contends that business-level strategies originate in 5 primary competitve forces in the firm’s environment:

1. threat of new entrants
2. bargaining power of suppliers
3. bargaining power of buyers
4. threat of substitute products or services
5. rivalry among competitors