INTERNAL ENVIRONMENT

ANALYSIS

Dosen : Drs. HA. ROMADLON, MM, CTP

 Fakultas Ekonomi dan Bisnis
School Economics and Business Resource-Based View of the Firm (RBV)
Telkom University
Coca-Cola Vs Pepsi Illustration :

Stock analyst look at the two and frequently conclude that Coke is the clear leader. They cite Cokes
superiority in tangible assets (warehouse, bottling facilities, computerization, cash etc) and
intangible assets (reputation, brand name awareness, tight competitive culture, global business
system).

They also mention that Coke leads Pepsi in several capabilities to make use of these assets
effectively-managing distribution globally, influencing retailer shelf space allocation, managing
franchise bottler relations, marketing savvy, investing in bottling infrastructure, and speed of
decision making to take quick advantage of changing global condition

2 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Three Basic Resource
Telkom University
1. Tangible Assets, are the easiest to identify and often found on a firms balance sheet. They
include production facilities, raw materials, financial resources, real estate and computers.
Tangible assets are the physical and financial means a company uses to provide value to its
customers.
2. Intangible Assets, are not assets that you can touch or see, they are very often critical in
creating competitive advantage like brand name, company reputation, organizational morale,
technical knowledge, patent & trade mark and accumulated experiences
3. Organizational Capabilities, are not specific inputs like tangible and intangibles assets,
they are skill-the ability and ways of combining assets, people and process to transform inputs
to outputs.

3 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business What Makes a Resource Valuable
Telkom University
1. Competitive superiority : Does the resources help fulfill a customers need better than
competitors ?
2. Resource scarcity : Is the resource in short supply ?
3. Inimitability : Is the resource easily copied or acquired ?
a. Physically unique resources
b. Path-dependent resource
c. Causal ambiguity
d. Economic deterrence
4. Appropriability : Who actually gets the profit created by a resource?
5. Durability : How rapidly will the resource depreciate
6. Substitutability : Are other alternatives available ?

4 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Key Resources across Functional Area
Telkom University

Firms product-service : breadth of product line

Concentration of sales in a few product or to a few customers
Ability to gather needed information about markets
1. Marketing Market share and submarket share
Product service mix and potential : life cycle of key product, profit-sales balance in product service. Etc and other 8
resources

Ability to raise short-term capital

Ability to raise long-term capital : debt-equity
2. Financial and Corporate-level resources (multi business firm)
Accounting Cost of capital relative to that of industry and competitors
Tax consideration
Relation with owners, investors and stockholders, etc and other 7 resources

Raw materials cost and availability, supplier relationship

Inventory control system, inventory turn over
3. Production, Location of facilities, layout and utilization of facilities
Operation, Technical Economies of scales
Technical efficiencies of facilities and utilization of capacity
Effectiveness of subcontracting use, etc and other 6 resources

5 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Cont
Telkom University

Management personal
Employees skill and morale
4. Personal Labor relation costs compared to those of industry and competitors
Efficiency and effectiveness, etc and other 5 resources
Relationship with suppliers and customers
5. Quality Management Internal practices to enhance quality of products and services
Procedures for monitoring of quality.

Timelines and accuracy of information about sales, operations, cash, and supplier
Relevance of information for tactical decision
6. Information System Information to manage quality issues : Customer services
Ability of people to use the information that is provided

Organization structure
Firms image and prestige
7. Organization and Firms record in achieving objectives
General Management Organization of communication sysem
Overall organization control system
Organization climate, organization culture

6 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business The Basic Function of Management
Telkom University

Function Description Stage of Strategic Management

Planning Planning consist of all managerial activities to preparing for the future . Specific task include forecasting,
establishing objective, devising strategy, developing policies and setting goals
Strategy Formulation

Organizing Organizing include all managerial activities that result in a structure of task and authority relationship. Specific
areas include organization design , job specialization, job description, job specification, span of control, unity of Strategy Implementation
command, coordination, job design, and job analysis.

Motivating Motivating involves efforts directed toward shaping human behavior. Specific topics include leadership, Strategy Implementation
communication, work group, behavior mo dification, delegation of authority, jog enrichment, job satisfaction,
needs ful- fillment , organizational change, employee morale and managerial morale

Staffing Staffing activities are centered of personal and human resource management. Include wage and salary
administration, employee benefit, in- terviewing, hiring, firing, training, development, employee safety, Strategy Implementation
affirmative action, etc

Controlling Controlling refers to all those management activities directed toward ensure that actual result are consistent
with plan results. Key areas of concern include quality, financial control, sales control, inventory control, Strategy Evaluation
expense control, analysis of variance, rewards and sanction

7 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business The Basic Function of Production Management
Telkom University

Function Description
Process Process decision concern the design of the physical production system. Specific decision include choice of technology, facilities
layout, process flow analysis, facility location, line balancing, process control, and transportation.

Capacity Capacity decision concern determination of optimal output levels for the organization-not too much and not too little. Specific
decision include forecasting, facilities planning, aggregate planning, scheduling, capacity planning, and queuing analysis.

Inventory Inventory decision involve managing the level of raw material, work-in-process, and finished good. Specific decision include what to
order, when to order, how much to order, and materials handling.

Workforce Workforce decision are concerned with managing the skilled, unskilled, clerical, and managerial employees. Specific decision include
job design, work measurement, job enrichment, work standard, and motivation technique.

Quality Quality decision are aimed at ensuring that high-quality good and services are produced. Specific decision include quality control,
sampling, testing, quality assurance, and cost control

8 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Analysis of Strength and Weaknesses
Telkom University

A Few Tools For Internal Analysis

Finance and Accounting : Capital asset pricing model, payback period, accounting return, present values, internal
rate of return, financial ratios, fixed and variable budget

Human Resources : Turn over analysis, morale surveys, training budget, analysis of personal needs and capabilities.

Marketing : Sales forecast, market share analysis, price volume relationship, sales force analysis, product and
market lines analysis.

Operation : Inventory analysis, aggregate and shop-floor analysis, break event analysis, labor, material and
overhead-cost analysis

R & D : Patent generated, project analysis, value analysis.

9 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Value Chain
Telkom University

General Administration
Support Activities

Human Resource Management

Research, Technology and System Development

Procurement
Primary Activities

Marketing
And Sales
Inbound Outbound Service
Logistic Logistic

10 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Primary Activities
Telkom University

Activities, cost and assets associated with :

Inbound Logistic : Fuel, energy, raw materials, parts component, merchandise, consumable items from vendors, suppliers.

Operation : converting inputs into final product from (production, assembly, packaging, equipment maintenance, facilities,
operation, quality assurance, environmental protection).

Outbound Logistic : physical distributing product to buyers (finish good warehousing, order processing, order picking and
packing, shipping, delivery vehicles

Marketing and Sales : sales force, advertising and promotion, market research, dealer and distributor support.

Service : providing assistance to buyers (installation, spare parts, maintenance and repair, technical assistance, buyers inquiry,
complain.

11 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Support Activities
Telkom University

Activities, cost and assets associated with :

General Administration: general management, accounting and finance, legal and regulatory, safety and security, management
information system, other overhead function.

Human Resource Management : recruitment, hiring, training, development and compensation, labor relation, development of
knowledge base skill.

Research, Technology and System Development: product R&D, process design and improvement, equipment design,
computer software development, telecommunication system, new data base capabilities

Procurement: purchasing and providing raw materials, supplies, services, outsourcing

12 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Translate Value Chain Activity to Competitive Advantage
Telkom University

Competencies and Company proficiency in

Company proficiency in Company gains a
Company capabilities gradually performing a core
performing one or two
performs emerge in certain competence basis for sustainable
value chain activities
activities in its competitively continuous to build and competitive
value chain
rises to the level of a
important value chain evolve in to a advantage
core competence
activities distinctive competence

13 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Strategic Advantage Profile
Telkom University

Internal Area Competitive Strength or Weakness

Marketing + Product line is extensive, and service is excellence

- Channels of distribution are weak in the southwest

R&D - No R & D performed

Operations + Excellence sourcing of raw materials

- Facilities are old and becoming out of date

Corporate Resources 0 Company size is about average of the industry

0 Profit has been consistent but average
- Union employees complain frequently

Finance + Balance sheet show ability to obtain needed capital, low debt
equity ratio, high working capital and favora ble stock price

14 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Internal Factors Evaluation (IFE)
Telkom University
1. List
key internal factors, use a total of 10-20 internal factors, list strength first and then
weaknesses
2. Assign a weight that range from 0,00 (not important) to 1,00 (all-important), internal strength
or weaknesses that have greatest effect on org performance should be assigned highest
weight
3. Assign 1-4 rating to each factor to indicate that factor represent a major weakness (rating=1), a
minor weakness (rating=2), a minor strength (rating=3), a major strength (rating=4). Rating is
company based, weighting is Industry based
4. Multiply each factor to determine score, and sum the score to determine total score of the
organization.

15 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business Internal Factor Evaluation (IFE) Matrix
Telkom University

Key Internal Factors Weight Rating Score

Strength
1. Inventory turn over increased from 5,8 to 6,7 0,10 3 0,30
2. Average customer purchase increased from $9,7 to $ 12,8 0,15 4 0,60
3. Employee morale is excellence 0,10 3 0,30
4. In-stores promotion resulted in 20 percent increased in sales 0,15 3 0,45

Weaknesses
1. Revenue from software segment of store down 12% 0,10 3 0,30
2. Location of store negatively impacted by new Highway 0,15 4 0,60
3. Bathroom in store need refurbishing 0,10 3 0,30
4. Revenue from businesses down 8% 0,15 3 0,45

Total 1,00 3,30

16 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business SWOT Analysis
Telkom University
Strength, is resource advantage relative to competitors and the need of the
market a firm serve or expect to serve.
Weaknesses, is limitation or deficiency in one or more resources or
competencies relative to competitors that impedes a firms effective
performance.
Opportunities, is a major favorable situation in a firms environment
Threats, is a major unfavorable situation in a firms environment

17 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business SWOT Analysis Diagram
Telkom University

Numerous
environmental
opportunities

Cell 3 : Support a turn around Cell 1 : Support an aggressive

oriented Strategy strategy
Critical internal Substantial internal
weaknesses strength

Cell 4 : Support a defensive strategy Cell 2 : Support a diversification

strategy

Major environmental
threat
18 Creating the great business leaders
 Fakultas Ekonomi dan Bisnis
School Economics and Business Tugas-4

1. Pelajari case perusahaan anda masing2 kelompok

2. Identifikasi sumber daya yang menjadi unggulan perusahaan tsb
3. Identifikasi sumber daya pada setiap fungsional : Marketing, Finance, Operation
/ Production, Management, IS/IT dan R&D
4. Buatlah SAP untuk case tersebut
5. Buatlah matrif IFE untuk perusahaan anda
6. Tugas dikerjakan mulai sekarang dan dikumpulkan hari ini paling lambat pukul
17.00

19 Creating the great business leaders