Understanding Strategic Business Planning for Business Analysts.
Matthew Coppola- Talk at the BA World Conference.
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To identify a firm’s capabilities, we can use a functional analysis. This is done by identifying organisational capabilities in relation to each of the principal functional areas of the firm:
CORPORATE FUNCTIONS
Eg. Strategic management of multiple businesses
Exemplar – Procter & Gamble
MANAGEMENT INFORMATION
Eg. MIS network linked to managerial decision making
Exemplar – Wal-Mart
RESEARCH & DEVELOPMENT
Eg. Innovative new product development
A good exemplar is 3M Corporation
This 108 year old company is still producing innovating products.
One of their key innovation practices is by picking out the best ideas in a diverse range of technologies.
So they’ll take one idea and apply it to another.
For example they’ve used the technology that creates layered plastic lenses to make stronger, abrasive, more reflective signs and golf gloves that give you a tighter grip without squeezing as hard.
OPERATIONS
Eg. Continuous improvements in operations
Exemplar – Toyota (TPS - Toyota Production System using lean thinking strategies)
PRODUCT DESIGN
Eg. Design capability
A good exemplar is Apple computer
Apple designers and engineers work together through every stage of product development.
When Apple was building the Macbook Pro, they devised a way to replace all the different parts of a standard notebook into one. Which they call the unibody, a single piece of aluminium carved into an enclosure for the laptop.
They also designed the trackpad to take into account sensitivity such as how much pressure triggers a click and the degree of friction over the surface, all to make sure their product was as ergonomic as possible and made operating the computer smooth and easy.
MARKETING
Eg. Brand management
Exemplar – Procter & Gamble
SALES & DISTRIBUTION
Eg. Speed of distribution
Exemplar – Amazon.com
For a resource or capability to establish a competitive advantage, two conditions must be present:
Firstly, to what extent are they scarce?
If a resource or capability is widely available within the industry, then even though it may still be fine to compete, it does not qualify as a sufficient basis for competitive advantage.
So the harder the resources and capabilities are to obtain, the better the organisation will be able to sustain a competitive advantage.
Secondly, to what extent are they relevant?
Resources and capabilities are more valuable to an organisation if they can be linked to one or more of the key success factors in an industry.
