Internal Fit

In: Business and Management

Submitted By eeliz28
Words 810
Pages 4
Key Learning Essay #2
MAN 6721 March 16, 2010

It is known that a company’s strategy is very important to their success. We have addressed how a company’s strategy must fit properly with the environment in which they are operating. We refer to this as their external fit and utilize Porter’s five forces to evaluate it. While external fit is important, it is also necessary to have a proper internal fit. I will first discuss more about internal fit is. Next, I want to address the importance of links to internal fit. Finally, I will look at some examples of companies and the strengths or weakness in their internal fit. The term internal fit may seem to be an oxymoron, but many companies are more worried about external factors before really addressing their core values. Many companies fail to realize that competitive advantage comes from internal fit. A competitive advantage comes from creating value to your customers that they would not have otherwise. Not only value creation but also value capture is a part of creating an advantage over competitors. Capturing value comes from organizational design. Making sure the processes inside your company are all reinforcing is essential to making sure the fit is right. To make sure activities inside the company are reinforcing one another we must create links between the different departments. All of the operations, such as human resources, production, marketing, and distribution must be on the same page. Companies must look for inconsistencies within different departments. We must also address the link between leadership and the company culture. Sam Walton serves a perfect example of this. His drive to always be the cheapest is what made Wal-Mart what it is today. Not only a company leaders’ beliefs about the company, but also their actions have a huge impact on the company culture. Sam Walton alone is not responsible…...

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