The stronger a company's financial performance and market position, the more likely it has a well-conceived, well-executed strategy.
SWOT analysis is a simple but powerful tool for sizing up a company's resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being.
A company is better positioned to succeed if it has a competitively valuable complement of resources at its command.
A competence is an activity that a company has learned to perform well, core competence is a competitively important activity that a company performs better than other internal activities; a distinctive competence is a competitively important activity that a company performs better than its rivals—it thus represents competitively superior resource strength.
The importance of a distinctive competence to strategy-making rests with:
Winning in the marketplace becomes more certain when a company has appropriate and ample resources with which to compete and especially when it has strengths and capabilities with competitive advantage potential.
A company's resource strengths represent competitive assets; its resource weaknesses represent competitive liabilities.
A company is well advised to pass on a particular market opportunity unless it has or can acquire the resources to capture it.
Simply making lists of a company's strengths, weaknesses, opportunities, and threats is not enough; the payoff from SWOT analysis comes from the conclusions about a company's situation and the implications for a strategy improvement that flow from the four lists.
The higher a company's costs are above those of close rivals, the more competitively vulnerable it becomes.
A company's value chain identifies the primary activities that create customer value and the related support activities.
A company's cost competitiveness depends not only on the costs of internally performed activities (its own value chain) but also on costs in the value chain of its suppliers and forward channel allies.
Benchmarking has proved to be a potent tool for learning which companies are best at performing particular activities and then using their techniques or best practices to improve the cost and effectiveness of a company's own internal activities.
Benchmarking the costs of company activities against rivals provides hard evidence of whether a company is cost competitive.
Performing value chain activities in ways that give a company the capabilities to outmatch rivals is a source of competitive advantage.
A weighted competitive strength analysis is conceptually stronger than an unweighted analysis because of the inherent weakness in assuming that all the strength measures are equally important
High competitive strength ratings signal a strong competitive position and possession of competitive advantage; low ratings signal a weak position and competitive disadvantage.
Zeroing in on the strategic issues a company faces and compiling a "worry list" of problems and roadblocks creates a strategic agenda of problems that merit prompt managerial attention.
A good strategy must contain ways to deal with all the strategic issues and obstacles that stand in the way of the company's financial and competitive success in the years ahead.
