Introduction
The purpose of the analysis is to investigate the internal capabilities and primary resources of MTN and what implication these have on the strategy of the organisation and the competitive advantage might be levered from them. The resource analysis is based on the financial yearend reporting of December 2009 (MTN)
Resource audit
In conducting the resource audit, the classification of the different type of resources derived by Grant will be used, see Figure 1 Link between resources, capabilities and competitive advantage (Grant, 2005). These resources, combination leads to the operational capabilities of the organisation.
Classify and assessing of these different types of resources is done as per Grant (2002) as following:
Tangible resources
Tangible resources are resources that can be acquired or traded rather easily. These include the physical infrastructure of the organisation, the financial capabilities and assets that the organisation holds. These resources can be easily copied and holds only limited feasibility for maintaining a competitive advantage.
Financial resources
Revenue growth indicates profitable returns for MTN which are indicative of further expansive strategies.
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization), which is an indicator of the organisations cash flow is up 6.7% to R46.1 billion.
MTN Group 2009 2008
Current Assets 46,024 54,787
Current liabilities 54,945 54,591
Current Ratio 0.84 1.00
Table 1 MTN 2009/2008 Current Ratio
A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at 2009. This shows that MTN not in good financial health and might be overextending itself.
However the current ratio reflects a lower cash balance due to high capital expenditure and less debt acquisition. Since EPS (Earnings per Share) has risen to 8.5% to 878.9, it
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