Internal and Macro-Analysis of the Company - Case Study Example

1. Internal Analysis The company has seen a sea change in its outlook and viewpoint as far as market presence is concerned. The most prominent aspect that is being highlighted for the internal analysis is that, the company has recognised the value of innovation and research based growth. The investment is made on various aspect of R&D, be it the VIP centres which run 24 hours or the capable engineers and research staff. The company has also made the mind frame regarding the market position. The very act of pulling out from discount stores and getting into high end store signifies that the company want to carve out its niche in the up market. Now it is achieving more focused growth in its target market. The company has also enhanced its capability to continuously bring new product lines in the market. Not only that, it is also upgrading the product with added utilities. This way it is also engaging the consumers for long term participation. Here the speed, at which the product line is launched or upgraded, has a strategic importance. 2. Appendix INTERNAL ANALYSIS - A AREA RESOURCES Financial resources Over US$ 100 billion rise in market value over last year. Liabilities creating assets continuously. Increasing equity base over the years Organizational resources Philosophy and methodology for continuous innovation across spectrum of product lines. Management structures and working methods designed to promote employee commitment and involvement: non hierarchical, teamed based structures Physical resources Continuous investment in R&D through development centres (VIP centres) Round the clock functioning of R&D centres. Own production units. Technological resources Achieving continuous and steadfast technological breakthrough Technological focus on niche i.e. profitable product lines like semiconductors and telecommunications. Human resources Visionary leadership like that of Yun. Capable and qualified Managers and Engineers. Reputation resources Established market reputation as innovative firm Market reputation for quality and performance Value for money products and services Reputation for developing multi-utility products INTERNAL ANALYSIS - B FUNCTIONAL AREAS CAPABILITIES Distribution Adopting profitable marketing channels i.e. shift from discount stores to high end stores. Balancing share of domestic and international sales. Human resources Capable and visionary leadership Importance of employee commitment (Day and night operation at R&D VIP centres Incentivising innovation and learning Marketing Product strategy: Range of products to suit wider choices Wide price range with added and core features Importance of style and image with innovation Frequently upgrading product lines Improvising on multi-utility for providing value for better margins Management Dedicated to innovation an performance Open to changes Manufacturing Effective capacity to introduce advanced process technologies and to expand capacity Product innovation and design quality Effective balance between product differentiation and economies of scale and scope R&D Innovative design features Continuous investment in R&D MACRO ANALYSIS FACTOR ISSUE ANALYSIS EFFECT ON INDUSTRY International World economy changing rapidly, becoming highly competitive and unstable. Reduction in trade barriers, through establishing trade agreements. The Globalisation movement - improvements in IT, and telecommunication Emergence of new economies & country development – causing new markets for opportunity. Increased competition (Negative) Acquisition of cost-effective labour & material(Positive) Reduction in trade barrier (Positive) New market avenue (Positive) Ruling: Positive Economic Increasing individual income. Ongoing global slowdown specially among Tiger economies in Far East Increasing Unemployment levels Interest & taxation rates. Increased affordability (Positive) Reduction in overall demand (Negative) Reduction in affordability (Negative) Falling Margins (Negative) Ruling: Negative Political Impact of international trading barriers. Government & attitude towards harrware industry Creating international trading agreements (Free trading agreements) with countries Regulations & agency – uncertainty with international trading, (Negative) Encourage industry expanding (Positive) International trading agreements ease entry into country (Positive) Ruling: Positive Technological Improvements & development of technology. IT revolutions & innovation in telecommunication & transportation. Technology integration into the industry Telecommunication / Internet capability. Improved communication & innovation at global level (Positive) More efficient manufacturing operations/procedures (positive) Achievement of economy of scale and scope (Positive) International marketing, fast product delivery to Markets (Positive) Ruling: Positive Legal Industry regulations, patent protection and intellectual property laws. Corporate social responsibility. Diversification of companies from legal point of view Patent & Copyright – supports innovation & growth (Positive) Conducive regulation for industry diversification (Positive) Brings corporate ownership (Positive) Ruling: Positive Social / Cultural The change in social attitude & behaviour towards product quality of hardware products Influence of education / literacy Social issues – concern for obesity Concern of increasing complexity of usage Quality innovative products bring satisfaction and enjoyment (Positive) Increase product acceptability. through more rational to buy product (Positive) Frequent change in design makes it difficult to adopt fast specially the 40-60 age groups (Negative). Ruling: Balanced Demographic Changes in work – knowledge workers have become the focus, thus people have become highly mobile. Need faster, mobile aids (Positive) Ruling: Positive Sustainability Continuously rapid changing environment, due to globalisation. The increasing issue of e-waste recycling, in an environmentally friendly way Change is continuous, uncertain, unstable (Negative) Uncertainty in ways for e-waste disposal (Negative) Ruling: Negative INDUSTRY ANALYSIS Items ISSUE ANALYSIS New Entrants Economies of Scale: Reluctance of new players supports it. Product Differences: Product differentiation is no longer sustainable so frequent product launch Brand Identity: Brand identity becomes more important and sustainable. Expected Realisation: More prominent. Impact Ranking: Moderately High Industry Rivalry (Competitors) Industry Growth Rate: Rapid because in increasing market size. But Individual share is diminishing. Brand Identity: Frequent Attempts to prove own brand better than others. Switching Costs: Switching cost is low for consumers. Exit Barriers: Exit barrier is low for firms due to less capital and more intellectual intensive nature of industry. Impact Ranking: High Suppliers Differentiation of Inputs: Moderate as the company is integrating backwards. Switching Costs of Suppliers: High as compatibility issue is concerned.. Presence of Substitute Inputs: Immense because of ongoing technological breakthrough. Threat of Forward Integration: Very less as it is highly knowledge strategy intensive. Impact Ranking: Moderate Buyers Switching Costs of Buyers: Low as abundant availability of options. Buyer Concentration (relative to industry): company wise it is very fragmented. Similarly it is fragmented for products. But is overall high relative to industry per se. Buyer Profitability: Greatest among all stakeholders as market is majorly value (price/utility) sensitive. Threat of Backward Integration: Almost difficult being highly knowledge and capital intensive. Impact Ranking: High Substitutes Relative Substitutes: Abundant for general purpose but scares for niche. Switching Costs: Very low as because of abundant options available. Buyer Propensity to Substitute: Very high as buyer is the real gainer of the improved situation. Impact Ranking: High Read More