This chapter covers the following objectives:

  • The benefits and limitations of SWOT analysis in conducting an internal analysis of the firm.
  • The primary and support activities of a firm’s value chain.
  • How value-chain analysis can help managers create value by investigating relationships among activities within the firm and between the firm and its customers and suppliers.
  • The resource-based view of the firm and the different types of tangible and intangible resources, as well as organizational capabilities.
  • The four criteria that a firm’s resources must possess to maintain a sustainable advantage and how value created can be appropriated by employees and managers.
  • The usefulness of financial ratio analysis, its inherent limitations, and how to make meaningful comparisons of performance across firms.
  • The value of the “balanced scorecard” in recognizing how the interests of a variety of stakeholders can be interrelated.