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Theinternalorganization resourcescapabilitiescorecompetenciesandcompetitiveadvantages 130309150622 phpapp02, Study notes of Architecture

University of Mysore Architecture

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Strategic Management:

Concepts and Cases 9e

Part I: Strategic Management Inputs

Chapter 3: The Internal Organization:

Resources, Capabilities, Core Competencies

and Competitive Advantages

Partial preview of the text

Download Theinternalorganization resourcescapabilitiescorecompetenciesandcompetitiveadvantages 130309150622 phpapp02 and more Study notes Architecture in PDF only on Docsity!

Strategic Management:

Concepts and Cases 9e

Part I: Strategic Management Inputs Chapter 3: The Internal Organization: Resources, Capabilities, Core Competencies and Competitive Advantages

Chapter 3: The Internal Organization:

Resources, Capabilities, Core Competencies

and Competitive Advantages

• Overview:

Importance of understanding internal organization
Value: Definition and importance
Tangible vs intangible resources
Capabilities: Definition and development
Core competencies: Criteria
Value Chain Analysis
Outsourcing: Definition and “why?”
Internal organization assessment and strategic decisions

Analyzing the Internal Organization (IO) (Cont’d)

• The Challenge of Analyzing the IO

Strategic decisions are non-routine, have ethical implications and influence the organization’s above- average returns - Involves identifying, developing, deploying and protecting firms’ resources, capabilities and core competencies
Managers face uncertainty on many fronts --
- Proprietary technologies
- Changes in economic and political trends, societal values and shifts in customer demands
- Environment – increases complexity
Intraorganizational conflict
- Due to decisions about core competencies and how to nurture them

Components of Internal Analysis Leading to

Competitive Advantage and Strategic

Competitiveness

Resources, Capabilities and Core

Competencies

• Competitive Advantage (CA) foundation includes

Resources
- Bundled to create organizational capabilities
- Tangible and intangible (As seen in Figure 3.1)
Capabilities
- Source of a firm’s core competencies and basis for CA
- Purposely integrated to achieve a specific task/set of tasks
Core Competencies
- Capabilities that serve as a source of CA for a firm over its rivals
- Distinguish a company from its competitors – the personality

Resources, Capabilities and Core Competencies

• Tangible Resources

Assets that can be seen, touched and quantified
Examples include equipment, facilities, distribution centers, formal reporting structures
Four specific types

• Intangible Resources

Assets rooted deeply in the firm’s history, accumulated over time
In comparison to ‘tangible’ resources, usually can’t be seen or touched
Examples include knowledge, trusts, organizational routines, capabilities, innovation, brand name, reputation
Three specific types

Building Core Competencies:

Criteria and Value Chain Analysis

• Four specific criteria of sustainable competitive

advantage – capabilities that are:

Valuable
Rare
Costly-to-imitate
Nonsubstitutable capabilities

• Competitive consequences:

Focus on capabilities that yield competitive parity and either temporary or sustainable competitive advantage

• Performance implications include:

Parity = average returns
Temporary advantage = avg. to above avg. returns
Sustainable advantage = above average returns

Building Core Competencies:

Criteria and Value Chain Analysis

• Value Chain Analysis

Primary activities
- Involved with product’s physical creation, sales and distribution to buyers, and service after the sale
Support activities
- Provide assistance necessary for the primary activities to take place

Internal Organization Assessment and

Strategic Decisions

• Firms must identify their strengths and

weaknesses

• Appropriate resources and capabilities needed to

develop desired strategy and create value for

customers/other stakeholders

• Tools (i.e., outsourcing) can help a firm focus on

core competencies as the source for CA

• Core competencies have potential to become core

rigidities

Competencies emphasized when no longer competitively relevant can become a weakness

Theinternalorganization resourcescapabilitiescorecompetenciesandcompetitiveadvantages 130309150622 phpapp02, Study notes of Architecture

Partial preview of the text

Download Theinternalorganization resourcescapabilitiescorecompetenciesandcompetitiveadvantages 130309150622 phpapp02 and more Study notes Architecture in PDF only on Docsity!

Strategic Management:

Concepts and Cases 9e

Chapter 3: The Internal Organization:

Resources, Capabilities, Core Competencies

and Competitive Advantages

• Overview:

Analyzing the Internal Organization (IO) (Cont’d)

• The Challenge of Analyzing the IO

Components of Internal Analysis Leading to

Competitive Advantage and Strategic

Competitiveness

Resources, Capabilities and Core

Competencies

• Competitive Advantage (CA) foundation includes

Resources, Capabilities and Core Competencies

• Tangible Resources

• Intangible Resources

Building Core Competencies:

Criteria and Value Chain Analysis

• Four specific criteria of sustainable competitive

advantage – capabilities that are:

• Competitive consequences:

• Performance implications include:

Building Core Competencies:

Criteria and Value Chain Analysis

• Value Chain Analysis

Internal Organization Assessment and

Strategic Decisions

• Firms must identify their strengths and

weaknesses

• Appropriate resources and capabilities needed to

develop desired strategy and create value for

customers/other stakeholders

• Tools (i.e., outsourcing) can help a firm focus on

core competencies as the source for CA

• Core competencies have potential to become core

rigidities

• External environmental conditions and events

impact a firm’s core competencies