Internal Analysis Paper Research Example | Topics and Well Written Essays - 1250 words

Internal Analysis - Research Paper Example It defines the factors that are a part of internal resources and the factors that prove to be more beneficial. Moreover, this paper explains why internal resources or factors held more importance than the external factors as compared with the Porter’s (1980) five forces model. It describes how the SWOT analysis complements the resource based view. The Mokulele Airlines Hawaii Company is used as an example. Resource Based View In this competitive world, organizations are always in search of some mechanism that can help them succeed competitively. Hence it is necessary for them to maintain a good quality standard. In such era of technological advancements, organizations are trying hard to get at the top and trying to produce a product that can outshine products made by their rival organizations. This has lead to many new approaches, some of which have been successful and some not. Both external and internal factors affect the organizational performance. The resource-based view w as got attention in a book written by Hamel and Prahalad named â€Å"Competing for the Future† (1994). Basically, this view portrays a firm as a bundle of resources. Right type and mix of these resources enable the firm to gain sustainable competitive advantage. Resource based view emphasize on the fact that the strength of organization’s internal resources determine its success. In recent times organizations have shifted their focus from products to its internal resources and capabilities (Barney, 1991). Porter (1980) five forces model with regards to external environment used to hold importance at first but the drawback in that model was that it didn’t provide the answer to whether the firm has the ability and competencies to compete in the market and exploit the opportunities or not? So with changing times organizations are finding resource based view as more suitable (Jim Anderson, 2007) Although firms are different from each other as their resources differ but according to Porter’s five forces model (market based view), all firms are homogeneous and compete via their positioning in the markets. In market based view, the competitive advantage depends upon firm’s ability to find attractive markets having most favorable characteristics identified through analysis of five forces provided by Porter (Tamanpowell,2007). The difference in both internal and external approaches to strategic decision making was highlighted in Harvard business article â€Å"Marketing Myopia† by Theodore Levitt (1960). The article identifies common organizational problem of defining their markets too narrowly. Richard Rumelt (1991) conducted a research in resource-based view. His research has contributed a lot in the fame gained by this strategy. Rumelt’s worked on the firm profit differentials within and across the organization. His findings showed that the differentials within the industry were far greater than across the organization . This applies that the industry specific differences should be contributing to these differences. These internal resources can be grouped into three broader categories, physical resources, human resources and organizational resources. Physical resources can be organizations plants, its equipments, its technological assets or raw material it holds. Human resources primarily include employees of the organization with all their experience, skill and knowledge. Organizational reso