Fourth Entry :Evaluating A Company’s Resources, Capabilities, And Competitiveness

From this chapter, we studying deep into evaluating a firm’s internal situation through those question;

1.       How well is the firm’s present strategy working?

This can be explained through financial segment for instant, profitability ratios, liquidity ratios, leverage ratios and other important measures of financial performance; internal cash flow, free cash flow price-to-earnings ratio and etc. Either the company is achieving their stated financial and strategic objectives or still in original position.

2.       What are the firm’s competitively important resources and capabilities?

It is well-known that a firm’s will have their own asset, and it is a big determinant of its competitiveness and ability in the marketplace, which is resource and capability.

The firm’s resource can be defined as tangible resources and intangible resources, whereas tangible resources are sort of physical, financial, technological assets and organizational resources. While, intangible resources is human asset and intellectual capital, brands, company image and reputational assets and etc.

3.       Is the firm able to take advantage of market opportunities and overcome external threats to its external well-being?

Through SWOT analysis, we can identify the firm internal weakness and strength, opportunities of the market and the external threats. Thus, SWOT analysis even though it is a simple tool, but it is a powerful enough sizing up the company values for future well-being.

4.       Are the firm’s prices and costs competitive with those of key rivals, and does it have an appealing customer value proposition?

Through using SWOT analysis, we can obtain a firm’s customer value which is can influence the profitably relative to close rivals.

5.       Is the firm competitively stronger or weaker than key rivals?

As result from SWOT analysis, we can obtain how does the firm rank relative to competitors on each of their essential factors that can determine market success.

6.       What strategic issues and problems merit front-burner managerial attention?

 It is a step issues listed from progress before to be solved for example, how to meet challenges of new foreign competitors.