ADMS 4900 Lecture Notes - Competitive Advantage, Social Capital, Tacit Knowledge
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25 Nov 2012
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Internal environment analysis looks at how the bundles of internal resources and activities drive firm performance. External environment accounts for 30% of firm performance. Firm performance is driven by position in the industry. Value is the price buyers are willing to pay for what a firm provides them. This can be measured by total profit; a firm is profitable to the extent that the value it receives exceeds to total costs involved. Increasing value can be either increases revenue, by either increasing sales or decreasing costs. It can be adding features to charge a premium or decreasing costs to increase your margin. You need to look at not only your firm, but only your competitors and what they are doing to increase their products value. Effects can extend outside your firm e. g. magna car manufacture start-up. Types of firm resources: tangible resources: easy to identify, measure and value.