Professional Documents
Culture Documents
when assessing the current and future viability of the company. To complete
an external
environmental scan, conceptual models such as the Porter Five-Forces
model, or the Slater and
Olson (2002) Augmented Porter Model may be employed. Both models
support leadership in
assessing the microeconomic environment, or the variables within the firms
immediate market
(Wood, 2011).
The external environmental scan may begin with an assessment of the
general
environment and trends such as social, legal and political which envelope the
organization and
Running head: SWOT 2
other players within the given market such as competitors, suppliers and
customers. The Porter
Five Forces, or the Augmented Porter Model, further assist leadership through
a more detailed
analysis of these players within the specific market and the impact these
players have on the
firms viability, or profitability (Stewart & Porter, 2008). It is important to note
that these models
are mental tools, and their effectiveness may be bounded by leaderships
ability to use them.
Internal Variables and their Analysis
The successful application of a SWOT Analysis also considers the internal
variables, or
the internal environment in the attempt to determine the strengths (S) and
weaknesses (W) of the
organization. These internal variables would include the financial health such
as liquidity and
leveraging, current product portfolio and future products in the pipeline, as
well as the value
chain and current or possible competencies. Much like the external analysis,
during the internal
analysis, conceptual models such as value chain analysis, BCG or GE Product
Portfolio
Matrices, or the 7-S Model may be employed.
SWOT, HR and Sustainable Competitive Advantage
Once the external and internal variables are assessed, leadership then
chooses a strategic
position within the market which best matches the observed strengths and
weaknesses against the
observed opportunities and threats. Although, this matching is not what
necessarily yields a
sustained competitive advantage. If one considers the resource-based theory
of the firm, all
activities within the firm add value to one another. Yet, resource allocation by
leadership, which
focuses and aligns all firm activities behind the strategic initiative are crucial
to the success of
the strategic position. Therefore, it is the ability for the firm to combine these
activities in such a
Running head: SWOT 3
competencies (Prahalad & Hamel, 1990) and the fit of these core
competencies (Porter, 1996)
which seem to be the only source of true sustainable competitive advantage
may be found in the
human capital of the organization. This observation thus supports the
importance of the human
resource component in any organizations ability to sustain competitive
advantage, and how
Running head: SWOT 4
References
Aaker, D. (2001). Developing business strategies (6th ed.). New York, NY:
John Wiley & Sons.
Porter, M., (1996). What is Strategy? Harvard Business Review, (NovemberDecember).
Prahalad, C.K., and Hamel, G., (1990). The Core Competencies of the
Corporation, Harvard
Business Review, (May-June).
Slater, S., and Olson, E., (2002). A Fresh Look at Market Analysis. Business
Horizons (January
-February): 15-23.
Stewart, T. (Interviewer) & Porter, Michael E. (Interviewee). (2008). The Five
Competitive
Forces That Shape Strategy: An Interview with Michael E. Porter [Interview
Video].
Retrieved from FreeVideoLectures Website
http://freevideolectures.com/Course/
2526/Strategy/5
Varlaro, J. D. (2011). Strategy and Sustainable Competitive Advantage.
Unpublished Essay. The
Chicago School of Professional Psychology.
Varlaro, J. D. (2009). Strategies, Blue Oceans and HR [Powerpoint Slides].
Retrieved from
http://public.me.com/jdvarlaro