CHAPTER #33–1The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive AdvantagesJoe Markert, Assistant ProfessorMGB Dept.
Question Of the Day3–2APPLESales of the Apple iPhone and iPad have been slumping. Apple has had two consecutive quarters with year-over-year revenue declines. The biggest product launch of the Cook era has been the Apple Watch, a device that hasn’t delivered iPhone-like volume.Apple is historically mum about its product development plans, and it’s unclear where Apple stands on initiatives like augmented and virtual reality, autonomous vehicles and artificial intelligence. Google parent Alphabet has been vocal about all of those technologies and has experiments underway. Facebook has invested heavily in virtual reality. And Apple’s most direct competitor, Samsung, has launched a line of virtual reality products.•Is Apple following the correct path with its focus on a positive ROI and increased stock value VS new products?•What strategy should Apple be following at his point – a scatter gun approach like Google & Facebook?
3–3Competitive Advantage•Firms achieve strategic competitiveness and earn above-average returns when their core competencies are effectively:–Acquired.–Bundled.–Leveraged.•Over time, the benefits of any value-creating strategy can be duplicated by competitors.
3–4Competitive Advantage (cont’d)•Sustainability of a competitive advantage is a function of:–The rate of core competence obsolescence because of environmental changes.–The availability of substitutes for the core competence.–The imitability of the core competence
3–5Analyzing the External EnvironmentBy studying the external environment, firms identify what they might choose to do.Opportunities and threats
3–6Figure 3.1Components of an Internal Analysis
3–7Creating Value•By exploiting their core competencies or competitive advantages, firms create value.•Value is measured by:–Product performance characteristics–Product attributes for which customers will pay•Firms create value by innovatively bundling and leveraging their resources and capabilities.
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- Summer '12