SWOT on "Internal Analysis and SWOT Analysis on California Pizza Kitchen"

Quoted Instructions for "Internal Analysis and SWOT Analysis on California Pizza Kitchen" Assignment:

The case in this course is a *****"ongoing*****" case, which means that we will be taking an intense look at one company over the course of 5 modules. This term, we will be conducting a strategic analysis of the California Pizza Kitchen (CPK). In order to be best prepared and perform well on the cases, it is highly recommended that you complete the background readings and the SLP before writing the case.

The objective for this case is to complete an internal analysis for CPK, using an RBV Framework, that will provide evidence for your assessment of the organization*****'s strengths and weaknesses. This will lead to the completion of a SWOT analysis. To refresh your memory about the SWOT analysis, you may want to review these readings assigned in Case 2:

SWOT analysis: Lesson. (2009). Retrieved from Marketing Teacher. Web site: http://marketingteacher.com/Lessons/lesson_swot.htm

Zahorsky, D. (2009). A business owner*****s secret weapon: SWOT analysis. Retrieved from About.com: Small Business Information. Web site: http://sbinformation.about.com/cs/bestpractices/a/swot.htm

Obviously, this can be a very extensive undertaking, requiring far more time and resources than we have for this course. So you will want to limit your analysis to the identification and evaluation of one or two key items in each element of the model, as described in the background readings and ennumerated in the SLP for this module.

Step One: Determine the economic value of the California Pizza Kitchen. This may involve some assumptions as to the cost of captial, just be clear in what assumptions you are making.

Step Two: Using the sources you identified in the SLP, collect some data on each of the tangible and intangible resources of the organization.

Step Three: Using the sources you identified in the SLP, collect some data on each of the 3 capabilities.

Step Four: In a 4-5 page paper, write up the results of your internal analysis, leading to conclusions about the strengths and weaknesses facing CPK as revealed by your analysis. Please note:

These strengths and weaknesses should be synthesized with the results of your module 2 case to make an overall SWOT analysis.

The data you report must be properly cited through intext citations and a reference list, or footnotes.

Format:

Consider the Case as a formal business report that you are developing for the Board of Directors and CEO as CPK*****'s company consultant. This is a professional document.

· Executive summary: a synopsis of the main points, conclusions and recommendations made in the longer report.

· Introduction: State the main purpose of the paper (thesis statement), what you hope to accomplish, and how you will go about doing it.

· Main Body: The *****"meat*****" of the paper. Emphasize analysis, not just description. Delineate separate topics or sections with headings.

· Conclusion: Summarize paper in the light of your thesis statement.

Additional Background info.. (if needed)

One of the criticisms of Porter*****'s 5-Forces model and an external analysis in general, is that it can help identify what problems or difficulties firms are likely to encounter in a given industry, but it gives not insight into what a particular company can do to manipulate those forces in their favor and thus gain a competitive advantage.

In this module, we will focus on analysis of the Internal Environment, or the company itself. This is sometimes referred to as the *****"company profile.*****"

Two useful frameworks that help us focus on the essential factors for analysis of the internal environment are Porter*****'s Value Chain and the Resource Based View framework (RBV).

After conducting an analysis of an organizations internal environment, you will be in a position to complete the last two elements of the SWOT analysis, identification of the strengths and weaknesses of a company.



Internal Analysis Components

Before we introduce the analytical models we will be using in this module, some background information is helpful.

A company has (A) primary activities and (B) support activities.

The primary activities are:

Research and Development (R&D),

Production (manufacturing),

Marketing and Sales,

Customer Service

The Support activities are:

Company Infrastructure,

Human Resources,

Materials Management, and

Infrastructure.

A. Primary Activities

Research and Development includes development and design of products, and of production processes. Many manufacturing companies have separate R&D departments, and for highly innovative companies this may be one of the most important departments in the organization (for example, see 3-M). Some service companies may include R&D activities as a part of marketing or customer service. For instance, banks introduce new products to attract customers.

Production is in charge of creating goods or services. Some companies manufacture products. Banks make loans. Retail companies sell products. These are instances of production.

The Marketing and Sales department plays several roles. It advertises and positions the brand, it identifies marketing needs, it sets pricing.

Service provides after sale service.

B. Support Activities

Materials Management manages the logistics of moving materials from procurement of inputs to production and then moving outputs through distribution to customers. Inventory management is part of it.

Human Resources focuses on employing the necessary skills mix to carry out the organization*****'s mission, and to motivate, train, and compensate the workforce.

Information Systems refers to computer support in processing functions and supporting company operations , as well as Internet.

Infrastructure: organizational structure, controls, and culture. The infrastructure must be capabable of supporting the primary activities of the organzation and be compatible with it*****'s strategy.

Power Point Presentation

Please go to Dr. Connelley*****'s presentation. For part two of the narrated slide presentation on strategic situation analysis, click on the title below. This slide presentation focuses on the importance of optimizing the internal functions of an organization in order to create added value to the firm*****'s products or services: Strategy for the Internal Environment



Porter*****'s Value Chain



Porter*****'s value chain is a widely used framework for organizing and interpreting an internal analysis. It is pictured below and discussed in the previously powerpoint presentation. You can see that it considers both primary and support activities, though it may use slightly different labels and definitions. By managing the various components of the value chain, companies can achieve a cost advantage over competitors, or distinguish themselves from competitors by offering a distinctively better product or service. Read more about Value chain analysis at:

n.a. (2007) The Value Chain. NetMBA. Retrieved from http://www.netmba.com/strategy/value-chain/







While the value chain can be a very valuable tool for breaking down and streamlining costs and creating maximum value, it is a very complicated process that typically involves considerable quantitative analysis. Refer back to the reading for Module 2 for a look at the types of financial ratios are used to determine the value of various components of the chain.

Recall from Chapter 2 that this reading is rather long, but has great information to help you with the Internal Analysis. Since you have already read the first part of the Chapter, in this module you only need to look at the second part. If you did not already do so, you will need to register with this site, but there is no fee involved.

Read the second part of Chapter Two which deals with the internal analysis:

Comeford, R., & Callaghan, D. Environmental, industry, and internal analysis. Retrieved from University of Rhode Island. Web site: http://www.scribd.com/doc/19448976/STRATEGICMGMTCOMERFORD



The Resource Based View

The resource based view arose directly in response to the criticism mentioned at the start of this page, that the external analysis is much less useful to a company seeking to attain a competitive advantage than its internal capabilities and resources.

*****"Instead of focusing on the accumulation of resources necessary to implement the strategy dictated by conditions and constraints in the external environment (I/O model), the resource-based view suggests that a firm*****'s unique resources and capabilities provide the basis for a strategy. The business strategy chosen should allow the firm to best exploit its core competencies relative to opportunities in the external environment.*****"

Source: *****"Strategic Management - Competitiveness and Globalization*****", M.A. Hint, R.D. Ireland, R.E. Hoskisson

Central to this analytical view is that a firm*****'s core competencies and resources are MORE critical to the development of a strategy than the external environment. In reality, the truth probably lies somewere in between, with a balance between external demands and internal capacities leading to the most successful competitive position. This is the essence of a SWOT analysis, and RBV can certainly inform an analysis of strengths and weaknesses.

For an excellent review of the basics of the Resource Based View, read the following chapter:

Henry, A. (2007). The Internal Environment: A Resource Based View of Strategy. Understanding Strategic Managment. Oxford University Press. Retrieved from http://www.oup.com/uk/orc/bin/9780199288304/henry_ch05.pdf



Required Readings:

Connelley, D. Strategy for the internal environment. Power Point presentation.

Comeford, R., & Callaghan, D. Environmental, industry, and internal analysis. Retrieved from University of Rhode Island. Web site: http://www.scribd.com/doc/19448976/STRATEGICMGMTCOMERFORD

Henry, A. (2007). The Internal Environment: A Resource Based View of Strategy. Understanding Strategic Managment. Oxford University Press. Retrieved from http://www.oup.com/uk/orc/bin/9780199288304/henry_ch05.pdf

n.a. (2007) The Value Chain. NetMBA. Retrieved from http://www.netmba.com/strategy/value-chain/



Case Readings:



SWOT analysis: Lesson. (2009). Retrieved from Marketing Teacher. Web site: http://marketingteacher.com/Lessons/lesson_swot.htm



Zahorsky, D. (2009). A business owner*****s secret weapon: SWOT analysis. Retrieved from About.com: Small Business Information. Web site: http://sbinformation.about.com/cs/bestpractices/a/swot.htm

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