OB lecture 8 business strategy internal audit

Lecture 8

Internal Audit
Unit 7 Business Strategy


1. Culture
•

Innovative

•

Bureaucratic


1.0 Culture
B

A

E

C

F

D
“System”, very difficult to move

2.0 Management
•

Planning

•

Organizing

•

Motivating

•

Staffing

•

Controlling


3.0 Marketing
1.

Customers Analysis

2.

Products/Services

3.

Pricing

4.

Distribution

5.

Market Research


4.0 Financial
•
•

Horizontal Analysis
Competitors or Industrial Average


Profitability
1.

4.0 Financial

Gross Profit Margin, Net Profit Margin

Assets Utilization

2. ROA, ROE
3. Assets Turnover
Leverage
4. Debt to Equity Ratio
5. Times Interest Earned Ratio
Investment
6 Earning Per Share


5.0 Operation

6.0 Research and Development


Alternative Approach
BPP Text Book


I. Limiting Factors
1.

Shortage of production capacity

2.

Restricted distribution network

3.

Poor marketing intelligence

4.

Lack of money

5.

Adequately trained staf

6.

Incompetent managers


II. Core Competencies
e.g. IKEA

Design
Purchasing
Store management


Value Chain


Value Chain Michael Porter
Primary Activities
1.

Inbound Logistics

2.

Operation /Manufacturing

3.

Outbound Logistics

4.

Marketing and Sales

5.

Service


Value Chain Michael Porter
Supporting Activities
1.

Firm Infrastructure

2.

Human Resources Management

3.

Technology Development

4.

Procurement


Value Chain
Competitive advantage stems from the
many activities a firm perform.


1996



1.0 Introduction
2.0 Vision and Mission
3.0 Stakeholders
4.0 Environmental Audit
4.1 PESTEL
4.2 Porter’s Five Forces
4.3 Clusters
4.4 External Threat and Opportunities
5.0 Internal Audit
5.1
5.2
5.3 Internal Strengths and Weaknesses

Key Internal Factors
Strengths

1.
2.
3.
4.
5.
.
10.
Weaknesses

1.
2.
.
10


End