Recently we have written about the external aspects of strategic
analysis through the use of SWOT, PESTEL and Porter’s Five
Forces analysis. Now, we will turn our attention inwards to look
at the importance of analysing resources to its strategy.
Strategy, in its simplest form, involves the use of an
organisation’s resources and capabilities to take advantage of
opportunities that exist in the external environment. It is
therefore important to understand what resources and
capabilities exist, and how they may be leveraged. Also, some
strategists believe that it is more useful to base a company’s
strategy around its resources and capabilities rather than
around its external market. This is because they believe that,
given the volatility caused by the competitive forces at play in
any market, resources and capabilities provide a more secure,
stable base for formulating strategy. This is known as the
resource-based view of the firm. An example often cited is that
of Honda. Honda Motor Company is the world’s bigg