Internal Analysis to Define a Strategy

What is consumer internal analysis?

Internal analysis:
Systematic evaluation of the key features of an organization

Core competences or distinctive capabilities

Core competences/distinctive abilities:
Combinations of resources and capabilities which are unique to a specific organization and which are responsible for generating its competitive advantage. Reputation, Architecture, Innovation, Strategic assets

SWOT analysis
It helps defines strategic options and is integrated at the strategic business unit level.

Internal information
Strengths:
What we do exceptionally well What advantages we have What valuable assets and resources we have What do members/customers identify as our strengths

Weaknesses:
What we could do better What we are criticized for or receive complaint about Where we are vulnerable

External information
Opportunities:
What opportunities we know about, but have not been able to address Emerging trends on which we can capitalize

Threats:
External roadblocks that block our progress What our competitors are doing differently Significant change coming to our members sector Technology that might be dramatically changing the sector and services to it Economic conditions that may affect our financial viability

The SWOT and TOWS matrixes

The BCG matrix: portfolio analysis

Helps the company allocate resources

Product/SBU 1 Product/SBU 4

Product/SBU 5 Product/SBU 6

Product/SBU 3 Product/SBU 2 Product/SBU 7

Cash cows are units with high market share in a slow-growing industry. These units typically
generate cash in excess of the amount of cash needed to maintain the business. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.

Dogs are units with low market share in a mature, slow-growing industry. These units typically
"break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. Dogs, it is thought, should be sold off.

Dilemmas are business operating in a high market growth, but having a low market share. They
are a starting point for most businesses. They have a potential to gain market share and become stars, and eventually cash cows when market growth slows. If they do not succeed in becoming a market leader, then after perhaps years of cash consumption, they will degenerate into dogs when market growth declines. Dilemmas must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Stars are units with a high market share in a fast-growing industry. They are successful dilemmas
and become a market leader in a high growth sector. The hope is that stars become next cash cows. Stars require high funding to fight competitions and maintain a growth rate. When growth slows, if they have been able to maintain their category leadership stars become cash cows, else they become dogs due to low relative market share.

Limits of the matrix: 1. Market growth is an inadequate descriptor of overall industry attractiveness 2. Relative market share is an inadequate description of overall competitive strength 3. The outcome of a growth-share analysis is highly dependent on how growth and share is
measured 4. While the matrix suggests investments strategies, it does not say anything about how to do it best 5. The model implicitly assumes that all SBUs are independent of one another except for cash flows