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Company Situation Analysis. Questions to Answer:. How well is the present strategy working? What are the company’s SWOT? Are the prices and costs competitive? How strong is the competitive position? What strategic issues does the company face?. How Well Strategy Is Working.

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questions to answer
Questions to Answer:
  • How well is the present strategy working?
  • What are the company’s SWOT?
  • Are the prices and costs competitive?
  • How strong is the competitive position?
  • What strategic issues does the company face?
how well strategy is working
How Well Strategy Is Working
  • Based on competitive approach
    • Low-cost leader
    • Differentiation
    • Market niche
how well strategy is working4
How Well Strategy Is Working
  • Qualitative analysis
    • Completeness
    • Internal consistency
    • Rationale
    • Suitability to the situation
  • vs. Quantitative analysis
    • Achieving stated financial and strategic objectives
    • Whether considered an industry leader
how well strategy is working5
How Well Strategy Is Working
  • Indicators of performance
    • Market share
    • Attraction and retention of customers
    • Profit margins
    • Net profit and ROI
    • Credit rating
    • Sales growth
    • Trends in stock price
    • Image and reputation
    • Measures of continuous improvement
slide6
SWOT
  • Strengths
    • Skill or important expertise
    • Valuable physical assets
    • Valuable human assets
    • Valuable organizational assets
    • Valuable intangible assets
    • Competitive capabilities
    • Position of market advantage
    • Alliances and cooperative ventures
slide7
SWOT
  • Weaknesses
    • Deficiencies in skills or needed expertise
    • Lack of physical, organizational or intangible assets
    • Missing competitive capabilities in key areas
slide8
SWOT
  • Opportunities
    • Not every industry opportunity is a company opportunity
    • Offer avenues for profitable growth
    • Offer potential for competitive advantage
    • Match well with company’s financial and organizational capabilities
slide9
SWOT
  • Threats
    • Emergence of new products
    • Emergence of new technologies
    • Entry of new competitors
    • New regulations
    • Vulnerability to interest rate fluctuations
    • Vulnerability to FX rate fluctuations
    • Demographic shifts
    • Political upheaval
swot example panera p c85
SWOT Example: Panera, p. C85
  • Strengths
    • An attractive and appealing menu (see case Exhibit 6)—Panera offers high quality food at a good price (the company delivers good value for the money); moreover, it has menu offerings for the more health/weight-conscious diner
    • Bread-baking expertise (definitely a core competence)—artisan breads are Panera’s signature product
    • Panera Bread is the nationwide leader in the bakery-café segment
    • Panera Bread has high ratings in customer satisfaction studies
    • A good brand name that management is continuing to strengthen
swot example panera p c8511
SWOT Example: Panera, p. C85
  • Strengths (cont.)
    • The fresh dough operations and sales of fresh dough to franchised stores is a source of revenue and profit (see case Exhibit 1 showing that fresh dough cost of sales to franchisees run well below the revenues from fresh dough sales to franchisees)
    • Initial success in catering—extends the company’s market reach
    • Has attracted good franchisees—sales at franchised stores run a bit higher than those at company-owned stores (see case Exhibit 2)
    • The financial strength to fund the company’s growth and expansion (see case Exhibit 1) without burdening the company’s balance sheet unduly with debt
swot example panera p c8512
SWOT Example: Panera, p. C85
  • Weaknesses
    • A less well-known brand name than some rivals (Applebee’s, Starbucks)
    • Sales at franchised stores run a bit higher than those at company-owned stores—why is this occurring? Are franchisees better operators?
swot example panera p c8513
SWOT Example: Panera, p. C85
  • Opportunities
    • Open more outlets, both company-owned and franchised—there is untapped growth potential in a number of suburban markets as shown in case Exhibit 3
    • Open Panera Bread locations outside the U.S. as market opportunities in the U.S. begin to dry up
swot example panera p c8514
SWOT Example: Panera, p. C85
  • Threats
    • Rivals begin to imitate some of Panera’s menu offerings and/or dining ambience, thus stymieing to some extent Panera’s ability to clearly differentiate itself from rival chains
    • New rival restaurant chains grab the attention of consumers and draw some patrons away from Panera—in other words, competition from other restaurant chains (either those in the fast-casual segment or other restaurant categories) becomes more intense
    • Panera Bread begins to saturate the market with outlets, such that it becomes harder to find attractive locations for new stores and the company’s growth slows
company competencies
Company Competencies
  • Company competence
    • Product of experience and learning
    • Real proficiency
    • Consciously built and developed
  • Competitive capability
    • Valuable and beneficial to customers
    • Differentiate company from competitors
    • Enhances competitiveness
company competencies16
Company Competencies
  • Core competence
    • Internal activities performed well
    • Central to competitiveness and profitability
    • Resides in people, not assets
  • Distinctive competence
    • Activities performed well compared to competitors
    • Basis for competitive advantage
distinctive competence
Distinctive Competence
  • Importance
    • Competitive capability provided
    • Cornerstone of strategy
  • Sustainable competitive advantage
    • Resource is hard to copy
    • Longevity of resource
    • Resource is competitively superior
    • Not easily trumped
differences in costs
Differences in Costs
  • Items purchased from suppliers
  • Basic technology and age of plants
  • Economies of scale
  • Exposure to inflation and FX rates
  • Marketing, sales and promotion
  • Transportation and shipping
  • Forward channel distribution
value chains
Value Chains
  • Activities that create value for the customer
  • Strategy critical
  • Based on core competencies
  • Benchmarking costs of key activities
  • “Best practices”
value chains20
Primary activities

Purchases and inbound logistics

Operations

Outbound logistics

Sales and marketing

Service

Support activities

R & D, technology and systems development

Human resources management

General administration

Value Chains
strategic options
Upstream

Negotiate

Integrate

Train suppliers

Use substitutes

Make up the difference elsewhere

Downstream

Push to reduce markup

Train distributors

Develop more economical distribution strategy

Make up the difference elsewhere

Strategic Options
strategic options22
Company

Streamline Operations

Reengineer processes and practices

Eliminate cost activities

Relocate activities geographically

Outsourcing

Technological improvements

Innovation

Simplify product design (Value Engineering)

Achieve backward and forward savings

Strategic Options
company s competitive position
Company’s Competitive Position
  • Competitive strength assessment
    • List industry’s key success factors
    • Rate firm and rivals on each factor
    • Sum individual ratings
    • Determine net advantage or disadvantage
  • Weighted vs. unweighted
company s strategic issues
Company’s Strategic Issues
  • Whether current strategy is adequate to meet trends in competitive forces
  • Adjust to respond to driving forces of industry
  • Industry’s future key success factors
  • Vulnerability to efforts of rivals
  • Capitalize on strengths
  • Prioritize opportunities
  • Protection against threats and weaknesses
company s strategic issues25
Company’s Strategic Issues
  • Competitive advantage or disadvantage
  • Strong and weak spots in current strategy
  • Additional actions needed
    • Improve cost position
    • Capitalize on emerging opportunities
    • Strengthen competitive position