Internal Factor Analysis

Summary (IFAS)
Information Technology

November 18, 2013

Presented by
Nitin Khattri
Amit Kumar
Ashish Jha
Ameya V Lakhe
Manish Pandey

Agenda
Introduction to IFAS
VRIO Framework
IT Industry Overview
Dell Inc. IFAS
Apple Inc. IFAS

Agenda
Introduction to IFAS
VRIO Framework
IT Industry Overview
Dell Inc. IFAS
Apple Inc. IFAS

Objectives

How can a firm identify its strengths and

weaknesses?
What are firms core competencies?
Can you create a sustainable competitive
advantage?

Strengths and Weaknesses

Goal:
Objective assessment of strengths and
weaknesses to:
identify, protect and deploy resources,
understand capabilities and develop core
competencies.
Assess strengths and weakness:
Relative to competitors and
Important to customers.

Internal Factor Analysis

Summary (IFAS)
Weighted
Weight

Internal Factors
Strengths

Rating
2

Comments

Score
3

Weaknesses

Total Weighted Score

1.00

Notes: 1. List opportunities and threats (510 each) in column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (Not
Important) in Column 2 based on that factors probable impact on the companys strategic position. The total weights must sum to
1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the companys response to that factor. 4. Multiply
each factors weight times its rating to obtain each factors weighted score in Column 4. 5. Use Column 5 (comments) for rationale
used for each factor. 6. Add the weighted scores to obtain the total weighted score for the company in Column 4. This tells how well
the company is responding to the strategic factors in its external environment.
Source:T. L. Wheelen and J. D. Hunger, External Strategic Factors Analysis Summary (EFAS). Copyright 1991 by Wheelen and
Hunger Associates. Reprinted by permission.

The Internal Environment

Approaches
to Organizational
Can use resource-based
approach
Can use value chain analysis
Analysis

Can use functional resource analysis

Agenda
Introduction to IFAS
VRIO Framework
IT Industry Overview
Dell Inc. IFAS
Apple Inc. IFAS

The
Framework
FourVRIO
Important
Questions:

Is the resource Valuable?

Is the resource Rare?
Is the resource Imitable?
Can the Organization make use of it?

Applying the VRIO Framework

10

Resource Based View

11

Internal Analysis

Tells us:
What the firms should do, given the relative
strength and weakness of resources and
capabilities

Managers Job:
Bundle resource and Capabilities to achieve
competitive advantage

VRIO Framework helps manager recognize

sources of competitive advantage

12

Resource/
Capability

Does it
have
Value?

Is it Is it
Is the company
Rare? Inimitabl Organized to
e?
exploit this
resource/capabil
ity

VRIO Analysis- Apple

13

The Brand

Yes

Yes

Yes

Yes

Supply Chain
Management
Top Executives

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

International
Product Distribution

Yes

No

No

Yes

Agenda
Introduction to IFAS
VRIO Framework
IT Industry An overview
Dell Inc. IFAS
Apple Inc. IFAS

14

Indian IT Industry An
Overview

15

16

17

18

Indian IT Industry - Weakness

19

Lower productivity levels.

Higher attrition rate.
Cost of telecom and network infrastructure
is much higher in India than in the west.
Still on the lower level of value chain.
Political opposition from developed
countries.
Weak domestic market.
Local infrastructure.

Agenda
Introduction to IFAS
VRIO Framework
IT Industry- An Overview
Dell Inc. IFAS
Apple Inc. IFAS

20

DELL INTRODUCTION

21

Dell Inc. is an American multinational

corporation headquartered in Round Rock,
Texas, that develops, sells, repairs and
supports computers and related products and
services.
Dell is 3rd Largest PC vendor and #1 shipper
of PC monitors in world.
More than 110,000 employees worldwide
More than 3,000 patents across the world
Acquired PerotSystems, Credant Technologies,
Gale technology etc as step to become leader
in server technology and data storage sphere.

Internal Factor Analysis Summary

(IFAS): Dell Inc.
Internal
Factors
Strengths
Product reliability and performance
Customized products where customers can decide the
specifications they want on their products
Direct sales model which helps the company collect
constant feedback
Competitive pricing

Weaknesses
High dependence on PC products
No business diversification
Minimal investments in Research and Development

Weight
1

.15
.20

3
4

.75
.80

.15
.15

3
3

.45
.45

.10
.10
.15

3
3
4

.30
.30
.60

1.00
Total Weighted Score

Ratin
g

Weighted
Score

3.15

Dell VRIO analysis

Aspect

Valu Rarity Imitabili

e
ty

Organis
ation

Competiti
ve
Advantag
e

Pricing

Yes

No

Yes

Yes

Parity

Customizati
on

Yes

Yes

No

Yes

Sustained

Marketing

Yes

No

Yes

Yes

Temporary

Direct Sales Yes

No

Yes

Yes

Parity

Agenda
Introduction to IFAS
VRIO Framework
IT Industry- An Overview
Dell Inc. IFAS
Apple Inc. IFAS

24

APPL INTRODUCTION

25

Apple Inc., formerly Apple Computer, Inc. is

an
American
multinational
corporation
headquartered in Cupertino, California, that
designs, develops, and sells consumer
electronics, computer software and personal
computers

Apple
is
the
world's second-largest information technolo
gy company
by revenue after Samsung Electronics, and
the world's third-largest mobile phone maker
after Samsung and Nokia

CONTINUE

26

Its consumer software includes the OS X and

iOS operating systems, the iTunes media
browser, the Safari web browser, and the iLife
and iWork creativity and productivity suites.

During the first five years of operations,

revenues doubled every four months, an
average growth rate of 700%.

Its best-known hardware products are the Mac

line of computers, the iPod music player, the
iPhone smartphone, and the iPad tablet
computer

CONTINUE

27

As of May 2013, Apple maintains 408 retail

stores in fourteen countries as well as the
online Apple Store and iTunes Store, the
latter of which is the world's largest music
retailer.

Apple is the largest publicly traded

corporation in the world by market
capitalization, with an estimated value of
US$415 billion as of March 2013

On September 30, 2013, Apple surpassed

Coca-Cola to become the world's most
valuable brand in the Omnicom Group's "Best
Global Brands" report

IFAS MATRIX
Item

Key internal factor

Weig
ht

Ratin score
g

STRENGTH
1

Apple is the most customer-focused

business.
They
are
absolutely
obsessed with the customer.

0.10

0.40

Customer loyalty that makes the

customer price insensitive

0.09

0.36

No debts means Apple can invest in

other sectors

0.10

0.4

Existing products are of high quality

while
compared
to
competing
products in the
market
.

0.07

0.21

0.09

0.36

28

It has succeeded in building an image

on providing good value .

IFAS MATRIX

29

Item

Key internal factor

Strong brand that is quite popular

among the Apple customers

Apple products are hard to imitate

Advance
team
consisting
of
executives in to conduct intelligence
on potential competitors.

Weig
ht

Ratin
g

scor
e

0.10

0.40

0.07

0.21

0.09

0.36

IFAS MATRIX
Ite
m

Key internal factor

Weig
ht

Ratin
g

scor
e

0.07

0.14

0.24

WEAKNESS
1
2

30

Poor relations with other key players

like Microsoft
Apple is too much dependent on
product launch

0.08

Apple emphasized its high-price

private label ("Value") and continued
to increase price

0.08

0.18

Strong presence only limited to few

countries

0.06

0.10

Total

3.36

CONCLUSION
IFAS matrix shows the information related to
strategy formulation, Apple achieved an overall
of 3.36 total weighted score based on the 1-4
scale. From here we can realize that the
company is successful internally.

31

Thank you

32