Internal analysis Case Study Example | Topics and Well Written Essays - 500 words

Internal analysis - Case Study Example As indicated in exhibit 2, marketing is valuable since the company has been able to cut down on its advertising spending through their strategies. The loyalty programs, used by the company, are common among the competing firms in the industry; hence putting the resource as a source competitive parity. The calculation shows that the company witnesses declining values for liquidity ratios and profitability ratios. This signpost the pitiable margin of safety the company has in settling its debt; consequently, focusing a brighter which jolts potential investors. The price increment had detrimental effects on the company’s profitability and reputation (ability to attract customers and investors) as portrayed by the ratios in exhibit 3. The company’s greatest weakness is the increase in marketing cost and the undue increase in product prices that increases its operating expenses without a corresponding increment in revenues and equity as explicated by the ratios in exhibit 3. The value chain activities analyzed in VRIO table above show the ability of the company to take up on investment activities while also withstanding competition in the market. Its act of increasing product prices affects its turnover and profitability. Price reduction and monitoring of its inventory level would help resolve the issue and attain a competitive advantage. The company generates most of its profit from shareholders investments. The 1.49% decrease in ROE between 2010 and 2011 indicates that the company is striving to diversify its investment and revenue sources. ROS declined by 0.23% between the period implying that its efficiency is plummeting and its ability to make profits is declining. Moreover, the decline in quick ratio values indicates that the company’s resource utilization is declining hence its compromising its ability to meet