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Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment in new products, distribution channels, production capacity and working capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point-of-view. An audit of financial resources would include assessment of the following factors:
Existing finance funds
- Cash balances
- Bank overdraft
- Bank and other loans
- Shareholders\' capital
- Working capital (e.g. stocks, debtors) already invested in the business
- Creditors (suppliers, government)
Ability to raise new funds
- Strength and reputation of the management team and the overall business
- Strength of relationships with existing investors and lenders
- Attractiveness of the market in which the business operates (i.e. is it a market that is attracting investment generally?)
- Listing on a quoted Stock Exchange? If not, is this a realistic possibility?
The heart of the issue with Human Resources is the skills-base of the business. What skills does the business already possess? Are they sufficient to meet the needs of the chosen strategy? Could the skills-base be flexed / stretched to meet the new requirements? An audit of human resources would include assessment of the following factors:
Existing staffing resources
- Numbers of staff by function, location, grade, experience, qualification, remuneration
- Existing rate of staff loss ("natural wastage")
- Overall standard of training and specific training standards in key roles
- Assessment of key "intangibles" - e.g. morale, business culture
Changes required to resources
- What changes to the organisation of the business are included in the strategy (e.g. change of location, new locations, new products)?
- What incremental human resources are required?
- How should they be sourced? (alternatives include employment, outsourcing, joint ventures etc.)
The category of physical resources covers wide range of operational resources concerned with the physical capability to deliver a strategy. These include:
- Location of existing production facilities; capacity; investment and maintenance requirements
- Current production processes - quality; method & organisation
- Extent to which production requirements of the strategy can be delivered by existing facilities
- Marketing management process
- Distribution channels
- IT systems
- Integration with customers and suppliers
It is easy to ignore the intangible resources of a business when assessing how to deliver a strategy - but they can be crucial. Intangibles include:
- The difference between the value of the tangible assets of the business and the actual value of the business (what someone would be prepared to pay for it)
- Does the business have a track record of delivering on its strategic objectives? If so, this could help gather the necessary support from employees and suppliers
- Strong brands are often the key factor in whether a growth strategy is a success or failure
- Key commercial rights protected by patents and trademarks may be an important factor in the strategy.
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Management, Strategic management, Marketing, Marketing management, Finance, Financial capital, Capital, Supply chain, Foreign market entry modes
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