Stakeholder and Capability Analyses

7/24/2019 Stakeholder and Capability Analyses

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MGT 450: Business Policy & StrategyRanucci, Spring 2016 76

Stakeholder and Capabilities

Analyses

Independently conduct Stakeholder andCapabilities Analyses

Learning Objectives


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The ExternalEnvironment

revisited By studying the general and

industry environments, firmsidentify the set of opportunitiesand threats which guide w h a tt h ey m i g h t ch o o se t o d o

Studying the competitiveenvironment highlights r e l a t i v ea d v a n t a g e s

But now we narrow the strategic

decision set by considering: W ha t o t h er s p r ef er t h e f i r m

t o d o (Stakeholder Analysis) And w h a t a f i r m ca n d o w el l

(Capabilities Analysis)

Macroecono

mic

Physical

Sociocultural

GlobalTrade

Demographic

Political/

Legal

Technological

Firm Competitor


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Stakeholder Theory The strategic management process unfolds within the context of stakeholders who have

conflicting goals Stakeholders are individuals, groups and organizations who can affect a firms strategy, are

affected by strategic outcomes, and have a claim on firm performance

CapitalMarket

Stakeholders

Shareholders Majorsuppliers

ofcapital(e.g.

banks)

ProductMarket

Stakeholders

Customers Suppliers

Host

communities

Unions

Organizational

Stakeholders

Employees Managers

Nonmanagers

Strategyinvolvesbalancing&managingconflictingstakeholdergoals


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Stakeholder Analysis

Step1:IdentifyStakeholders

Examplesofpotentialstakeholders:

Suppliers

Buyers

Employees

CapitalMarkets

Communities

Government

SpecialInterestGroups

Step2:AnalyzeStakeholderInterests

Identifyrelevantissues,suchas:

Profitability

Jobsatisfaction

Environmentalsustainability

Serviceavailability

Compliance

Ratetheimportanceofeachissueforeachstakeholder

Wherearestakeholdersalignedandwheredotheyconflict?

Step3:AssessImpactsofStrategicActions

Foreachofyourpotentialstrategicactionsassesstheimpactoneverypossiblestakeholder(positiveor

negative,how

so)

UsetheIssueratingstoguidethisassessment

Againevaluatepotentialstakeholderalignmentandconflict

Service

Quality

OSHA

Compliance

Employees Medium High

Shareholders Medium Medium

Government Low High

Buyers High Low


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Resources & Capabilities Firms have a set of resources:

Tan g i b l e r esou r ces (seen, touched and quantified) Financial resources Physical resources (e.g. facilities, inventory) Technological resources (e.g. patents, copyrights, trademarks)

I n t a n g i b l e r eso u r ces (accumulated over time and are difficult to

analyze) Knowledge, skills, ideas Organizational routines (the way people work together) Brand, reputation Organizational culture Stakeholder relationships, relational networks

Capabilities use and combine resources to complete value-creatingorganizational tasks


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Capability Analysis

DetermineValueChain

IdentifyCapabilities

Evaluatealignment

Evaluatesustainability

Recall capabilities are used to complete v a l u e - cr ea t i n g o r g a n i za t i o n a l t a sk s, so we need tounderstand what those tasks are.

The value chain is the set of activities that create

& support customer value


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Management

Information

Systems

Research&

Development

SupplyChain

Management Operations Distribution

Marketing&

Sales Service

Human

Resources

Finance

Acquiringandmanagingfinancialresources,securing

capital,andmanagingrelationshipswithinvestors

(Example:Facebook)

Selecting,training,retaining,compensatingand

developing

human

capital

in

the

organization

(Example:

GE)

Obtaining,managing,linkinginformationandknowledge

throughoutthefirmusuallyusingsophisticatedtechnologies

(Example:Walmarts pointofpurchasedatacollectionto

manageinventories)

Developingnew

products,enhancing

existingproducts

(Example:

Apple)

Anyactivity

necessaryto

receiveraw

materials;e.g.

sourcing,

procurement,

logistics

management

(Example:

Amazon)

Changeraw

materialsinto

finishedproducts;

e.g.product

production

processesand

efficiency

management

(Example: Sonyin

miniaturization)

Gettingthefinal

producttothe

customer;e.g.

handlingorders,

delivery,

arranging

payment

(Example:

Zappos)

Customer

segmentation,

advertising,

promotions,

branding,sales

force

developmentand

training

(Example:Proctor

&Gamble)

Gettingand

incorporating

feedbackfrom

customers,post

sale

technicalsupport

(Example:LLBean)

Value

Chain


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StratSim Application

Now that you haveexperience through thepractice round.What domains in the valuechain can you manipulatein the simulation? How?

84

Management

Information

Systems

Research&

Development

SupplyChain

Management Operations Distribution

Marketing&

Sales Service

Human

Resources

FinanceAcquiringandmanagingfinancialresources,Capital

planning

Training,motivatinganddevelopinghumancapital

Strategicleadership

Obtaining,managing,linkinginformationandknowledge

throughoutthefirm

Innovating,Developingnew

/Enhancing

productsand

processes

Anyactivity

necessaryto

receiveraw

materials

Productproduction

processesand

efficiency

management

Gettingthe

final

producttothe

customer

Advertising,promotions,

branding,sales

Gettingand

incorporating

feedbackfrom

customers


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What are your core set of

capabilities? Usually 3-6 that are most critical Capabilities can be at a particular activity in the value chain or

integrate across activities. Capabilities integrate across knowledge resources:

Processes

Routinesforhowtogetworkdone

People

Thepeople(positions,notnecessarilywhatparticularperson)criticaltoexecuteandimprovetheprocesses

Systems

Informationsystemsanddatabases

Proprietarytechnologies

Usedtoautomateprocesses

And/orconnectpeopletoinformation

Determine

ValueChain Identify

Capabilities Evaluate

alignment Evaluate

sustainability


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Completing your capability analysis

Determine

ValueChain

Identify

Capabilities

Evaluate

alignment

Evaluate

sustainability

I n t e r n a l A l i gnm en t

Are the People, Processes and Systems

aligned? Are there any people, process or systems

gaps that degrade the capability?

E xt er n a l A l i g nm en t

What is your value proposition to thecustomer? Why do they buy from you

(e.g. product differentiation, low cost,customer experience)?

Are the people, processes and systemsaligned with the customer valueproposition?

I m i t a t i o n

Can the capability be easily imitated?

Capabilities are difficult to imitate when use scarce resources, were developed over a long history, are causally ambiguous, OR involve complex relationships (social dynamics such

as trust, friendships, interpersonal relationships)

D u r a b i l i t y How long can the capability continue to provide

value (e.g. a patent only is only protected for afixed period of time)?


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Take-Aways

An organization can have many stakeholders withconflicting interests that need to be considered whenevaluating strategic actions.

Value chain analysis helps firms identify capabilities

that contribute to customer value Capability Analysis helps an organization understand

what they do well and how sustainable it is

I m p o r t a n t : Just because your firm is good at

something doesnt mean there is opportunity to exploitit. That being said, some firms have a capability indeveloping markets to exploit other capabilities.

Documents

Stakeholder and Capability Analyses