2018BEC_FlipBooks

2018_FlipBook_Thompson_Crafting & Executing Strategy_22e

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Organizations succeed in a competitive marketplace over the long run because they can do certain things their customers value better than can their competitors. Robert Hayes, Gary Pisano, and David Upton— Professors and consultants Crucial, of course, is having a difference that matters in the industry. Cynthia Montgomery—Professor and author If you don't have a competitive advantage, don't compete. Jack Welch—Former CEO of General Electric company a lasting competitive advantage over rival companies? 3. What are the company's strengths and weak- nesses in relation to the market opportunities and external threats? 4. How do a company's value chain activities impact its cost structure and customer value proposition? 5. Is the company competitively stronger or weaker than key rivals? 6. What strategic issues and problems merit front- burner managerial attention? In probing for answers to these questions, five analytic tools—resource and capability analysis, SWOT analysis, value chain analysis, benchmark- ing, and competitive strength assessment—will be used. All five are valuable techniques for revealing a company's competitiveness and for helping com- pany managers match their strategy to the compa- ny's particular circumstances. Chapter 3 described how to use the tools of indus- try and competitor analysis to assess a company's external environment and lay the groundwork for matching a company's strategy to its external situ- ation. This chapter discusses techniques for evalu- ating a company's internal situation, including its collection of resources and capabilities and the activities it performs along its value chain. Internal analysis enables managers to determine whether their strategy is likely to give the company a signifi- cant competitive edge over rival firms. Combined with external analysis, it facilitates an understand- ing of how to reposition a firm to take advantage of new opportunities and to cope with emerging competitive threats. The analytic spotlight will be trained on six questions: 1. How well is the company's present strategy working? 2. What are the company's most important resources and capabilities, and will they give the

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