Examining the Internal Environment: Resources, Capabilities, Core Competencies & Value Chain Analysis To be sustaining in the market, a company should encourage the knowledge of the internal environment that affecting the business. There are many internal factors that impacting the company’s performance. First is about the company’s strategy. How well is the company’s strategy working? Strategy should be transferred from up to down, so all the members in the organization know what strategy that they are implementing in running the company.
Second are the company’s competitively important resources and capabilities. Resource is scarce. It will be a great challenge for a company to manage their resources in order to gain the competitive advantage. A company should have the ability to identifying and determining the competitive power of their resources, because the resources and capabilities is the foundation of competitive advantage. Third is about company value chain. Are the company’s costs and price already competitive in the market?
A company / industry should do benchmarking about their costs and price between them and competitor. A company should manage the costs. Fourth, a company’s should know their strength. They can focus on their strength in order to beat their rivals. Not only know the strength, but also their weakness against rival. By knowing the strength and weakness, a company can define best strategy to offense and defense to get the maximum results. The last is about strategic issues and problems that must be addressed by management.
This is the most important one that drawing on the results of both external and internal evaluations of the company. The issues and problems are very serious and will be affected a company’s strategy. The task of crafting a better strategy has got to go to the top of management’s action agenda to resolve the issues and problems. The detail implementation of these 5 key points is shown by case “A resource-based view of competitive advantage at the Port of Singapore”. Port of Singapore has a sustainable competitive advantage regarding their place and resources compare to other competitors.
Port of Singapore is the number one transshipment port in the world not because their strategic location, but because they can manage well their competitive advantage and they run their operations in efficient way that reduce a lot of costs. Beside that, Port of Singapore also makes investment in their information and operations technology. All the strategy that they run are identify external resources that can be used to one’s advantage and build the internal resources capable of enhancing those external resources.
All of these are supported by technology. By doing these, they can sustain in the market. Lesson learned: We know that external environment is important and should be explored when we running a business. But internal environment itself is also important. We cannot only focus on the external one, but also the internal situation in the company. What our strength, and what other weakness. By identify these, we can define the strategy.
