Assessment of firm’s strengths and weaknesses. You should perform a value chain analysis. Examine each of
the value creation functions of the organization, and identify the functions in which the organization is currently
strong and currently weak. Some organizations might be weak in marketing; some might be strong in research
and development. You must analyze how efficiently and effectively each activity is being performed. This
should go beyond a qualitative assessment to include an in-depth analysis of quantitative data. For example,
the efficiency of the materials-management function might be measured by inventory turnover; the
effectiveness of the customer service function might be measured by the speed with which customer
complaints are satisfactorily resolved; and ability of the enterprise to deliver reliable products might be
measured by customer returns and warranty costs. You need to identify those quantitative measures that are
important for their business, collect data on them, and assess how well the firm is performing. As an aid to this
process, whenever possible you should benchmark each activity against a similar activity performed by rivals
to see how well the company is doing. In addition to benchmarking performance against rivals, it can be
valuable to benchmark performance against best-in-class companies in other industries. Finally, make lists of
these strengths and weaknesses. 20 Points
Are any of the firm’s resources/capabilities sources of competitive advantage(s)? Are the firm’s advantages
and disadvantages temporary or sustainable? You should perform a detailed VRIO analysis to assess each
capability/resource separately. You are required to evaluate the competitive implications of at least six core
capabilities and/or resources. 25 Points
What do the firm’s financial statements say about its health? Trends? Comparison to competitors? You must
perform financial ratios analysis. Compare and benchmark the target firm’s performance to other competitors in
the same industry or against the industry average. All of the following aspects of performance should be
considered, because each provides a different type of information about the financial health of the firm: •
Profitability ratios—how efficiently a company utilizes its resources. • Activity ratios—how effectively a firm
manages its assets. • Leverage ratios—the degree to which a firm relies on debt versus equity (capital
structure). • Liquidity ratios—a firm’s ability to pay off its short-term obligations. • Market ratios—returns earned
by shareholders who hold company stock. Feel free to include any figures, tables, charts, etc. in your reports
and presentations in order to illustrate your analysis. Don’t just tack the exhibits on at the end of your reports
and let the reader figure out what they mean and why they are included. Instead, in the body of your report, cite
some of the key numbers, highlight the conclusions to be drawn from the exhibits, and refer the reader to your
charts and exhibits for more details. 15 Points
Strategic Implementation. After selecting the most appropriate strategy, that is, the strategy with the highest
probability of helping your firm in its efforts to earn profits), implementation issues require attention. Effective
synthesis is important to ensure that you have considered and evaluated all critical implementation issues.
Issues you might consider include the structural changes necessary to implement the new strategy. In addition,
leadership changes and new controls or incentives may be necessary to implement strategic actions. The
implementation actions you recommend should be explicit and thoroughly explained. Occasionally, careful
evaluation of implementation actions may show the strategy to be less favorable than you thought originally. A
strategy is only as good as the firm’s ability to implement it. 10 Points
Sample Solution