Fundamentals of Management, 8th ed

Evaluating an Organization’s Strengths

Organizational strengths

are skills and capabilities that enable an organization to create

and implement its strategies. Strengths may include things like a deep pool of managerial

talent, surplus capital, a unique reputation and/or brand name, and well-established

resource

deployment

How an organization

distributes its

resources across the

areas in which it

competes

business-level

strategy

The set of strategic

alternatives from

which an

organization chooses

as it conducts

business in a

particular industry or

market

corporate-level

strategy

The set of strategic

alternatives from

which an

organization chooses

as it manages its

operations

simultaneously

across several

industries and

several markets

strategy

formulation

The set of processes

involved in creating

or determining an

organization’s

strategies; it focuses

on the content of

strategies

strategy

implementation

The methods by

which strategies are

operationalized or

executed within the

organization; it

focuses on the

processes through

which strategies are

achieved

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Part 2: Planning

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distribution channels.

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Sears, for example, has a nationwide network of trained service

employees who repair its appliances. Jane Thompson, a Sears executive, created a plan to

consolidate repair and home improvement services nationwide under the well-known

Sears brand name and to promote them as a general repair operation for all appliances,

not just those purchased from Sears. Thus, the firm capitalized on existing capabilities

and the strength of its name to launch a new operation.

A distinctive competence, introduced earlier in this chapter, is a strength possessed by

only a small number of competing firms. Distinctive competencies are rare among a set

of competitors. When George Lucas founded Industrial Light & Magic (ILM), for exam-

ple, the new venture brought the cinematic art of special effects to new heights. Some of

ILM’s special effects can be produced by no other organization; these rare special effects

are thus ILM’s distinctive competencies. Indeed, ILM (now owned by Disney) had no

real competitor until Peter Jackson formed Weta Digital Effects to help bring The Lord

of the Rings to the screen. But even so, although ILM and Weta have some of the same

competences, each also has proprietary technology that gives it certain unique advan-

tages. Organizations that exploit their distinctive competencies often obtain a competi-

tive advantage and attain above-normal economic performance.

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Indeed, a main

Mission

An organization’s fundamental purpose