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    The background material discussed the process and utility of conducting an internal analysis - particularly with regard to it providing support for the identification of strangths and weaknesses in connection with a SWOT analysis. Two different tools of methods were discussed: The Value Chain Analysis and the Resource Based View.

    You will be researching sources of information required to complete a an RBV analysis.

    Step One: RBV is based on the concept of the creation of economic rent thought distinctive capabilities. Thus, the first step is to find a way to value a firm's economic rent or Economic Value Added (EVA). A firm's EVA is the amount of capital it generates above and beyond the cost of doing business. Find out how EVA is measured and how you can determine a company's ecomomic rent.

    According to RBV, a firm's competitive advantage is driven by its ability to manage its unique capabilities and resources to achieve above average returns.

    Step Two: Resources are the inputs into a production process. They can be capital, equipment, patents, skill sets of individual employees and/or managers, financial resources, etc. Resources can be tangible or intangible. Individually, they may not necessarily lead to a competitive advantage, it is how they are used and the synergies they create that make them strategically valuable. Research web and library sources that would give you data on a company's unique resources. Find a minimum of 2 different sources for data and information concerning each of the following 6 resources, and note that some sources may give you information on more than one factor:

    Tangible Resources
    1. Physical Resources
    2. Financial Resources
    3. Human Resources
    Intangible Resources
    1. Technical Resources
    2. Intellectual Resources
    3. Goodwill

    Step Three: Distinctive capabilities are those competencies posessed by a firm that can not be copied or copied only with great difficulty. Research web and library sources that would give you data on a company's unique resources. Find a minimum of 2 different sources for data and information concerning the following:
    1. Architecture
    2. Reputation
    3. Innovation

    Step Four: In a 2 page paper (not including cover page or references), list your resources from steps 1-3 above. For each source, provide a brief paragraph explaining what information is available, how it would be useful in an internal analysis, and critiquing the source (for example, What are the limitations of the source? Is one better than the other? Why?)


    You may be concise in your presentation of this Project. It does not have to follow the conventions of a written case paper. Tables or bulleted lists may help you present the information concisely and make it easy for the reader to quickly grasp the information. Give the full title of the resource and a URL, if applicable, as you list them. Be sure to provide complete references for each source on a separate reference page.

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    Solution Preview

    The selection of the company is Toyota Motor Corporation. This is a multinational corporation headquartered in Japan. The company has emerged as the largest auto maker in terms of revenues and production.

    Step One:
    The Economic Value Added is the excess of actual returns over the minimum required by the suppliers of capital. This measure expresses the ability to create value in monetary terms. The EVA is calculated by deducting from net operating profit after taxes a capital charge giving the cost of capital. The difference between NOPAT is that EVA accounts for the cost of capital. Taking the cost of capital into account makes economic value added an economic measure. The EVA is the measure of economic rent and is used to measure efficiency. With which a company uses its resources. In case of Toyota, the net income from Continuing Operations is $2.243 billion. This can be taken to be close to NOPAT.


    Toyota: Too many US plants
    Too many factories mean that Toyota is committed to using these factories at the US. In the US the cost of labor as well as the cost of certain raw materials is very high leaving the company at a disadvantage.
    Toyota; assembly and parts plants;
    This article points out that the plants of Toyota are both flexible and produce multiple models of cars enabling the company to gain competitive advantage. It can quickly change its production in response to changes in market conditions.

    Toyota: Apology but no new recall
    This article explains how the recall of 8.1 million cars of Toyota has strained the financial resources of the company; however, the CEO has not announced any fresh recall. This is a ...

    Solution Summary

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