Internal Analyis is to find out company's strength and weakness to be an unique in industry. One good example is Walt Disney Company. During 1980s, new appointed CEO, Michael Eisner fully used WDC's recource like re-releasing old movies, shows, animations. He also fully used their capabilities to make new hits like Little Mermaid, Beauty and the Beast. By mixing both strength WDC has, WDC built new strategy to partner with Pixar to release Toy Story and Monster Inc. Those all made WDC successfully again.
Value Creation and Pricing Options is an interesting tool to help company decide their product's price and evaluation. "U" is utility to consumer. "P" is the price and "C" is the cost. When we compare GM and Toyota, we can find out why Toyota making more money. Due to better quality and design, Toyota cars are more welcome and consumers are willing to pay higher price. That means higher "U". In the same time, Toyota's lean production system help to reduce the cost "C". Toyota's profit, "P"-"C" is higher than GM's if "U"-"P" remains same on both companies.
ROIC is used to compare how efficient invested money does. Walmart does better than Target in ROIC. When we compare their individual items. Walmart has a higher number on COGS/Sales. That means Walmart either prices products lower OR they paid higher on products. Walmart actually priced everything lower than Target does. Everything good we heard about Walmart like lower location cost, efficient inventory, lower price, low administration cost all can be seen on ROIC diagram. It is a great tool to compare 2 companies and find out their uniqueness.
Internal Analyis is to find out company's strength and weakness to be an unique in industry. One good example is Walt Disney Company. During 1980s, new appointed CEO, Michael Eisner fully used WDC's recource like re-releasing old movies, shows, animations. He also fully used their capabilities to make new hits like Little Mermaid, Beauty and the Beast. By mixing both strength WDC has, WDC built new strategy to partner with Pixar to release Toy Story and Monster Inc. Those all made WDC successfully again.
Value Creation and Pricing Options is an interesting tool to help company decide their product's price and evaluation. "U" is utility to consumer. "P" is the price and "C" is the cost. When we compare GM and Toyota, we can find out why Toyota making more money. Due to better quality and design, Toyota cars are more welcome and consumers are willing to pay higher price. That means higher "U". In the same time, Toyota's lean production system help to reduce the cost "C". Toyota's profit, "P"-"C" is higher than GM's if "U"-"P" remains same on both companies.
ROIC is used to compare how efficient invested money does. Walmart does better than Target in ROIC. When we compare their individual items. Walmart has a higher number on COGS/Sales. That means Walmart either prices products lower OR they paid higher on products. Walmart actually priced everything lower than Target does. Everything good we heard about Walmart like lower location cost, efficient inventory, lower price, low administration cost all can be seen on ROIC diagram. It is a great tool to compare 2 companies and find out their uniqueness.
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