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Unformatted text preview: Chapter 3: The Internal Environment Chapter 3 The Internal Organization: Resources, Capabilities, Core Competencies and Competitive Advantages KNOWLEDGE OBJECTIVES 1. Explain why firms need to study and understand their internal organization. 2. Define value and discuss its importance. 3. Describe the differences between tangible and intangible resources. 4. Define capabilities and discuss how their development. 5. Describe four criteria used to determine whether resources and capabilities are core competencies. 6. Explain how value-chain analysis is used to identify and evaluate resources and capabilities. 7. Define outsourcing and discuss reasons for its use. 8. Discuss the importance of identifying internal strengths and weaknesses. CHAPTER OUTLINE Opening Case Apple Defies Gravity with Innovative Genius Analyzing the Internal Organization The Context of Internal Analysis Creating Value The Challenge of Analyzing the Internal Organization Strategic Focus GE Builds Management Capabilities and Shares Them with Others RESOURCES, CAPABILITIES, AND CORE COMPETENCIES Resources Capabilities Core Competencies BUILDING CORE COMPETENCIES Four Criteria of Sustainable Competitive Advantage Strategic Focus Ryanair: The Passionate Cost Cutter that is both Loved and Hated Value Chain Analysis OUTSOURCING COMPETENCIES, STRENGTHS, WEAKNESSES, AND STRATEGIC DECISIONS SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 3-1 Chapter 3: The Internal Environment LECTURE NOTES Chapter Introduction : As indicated in Chapter 1, firms follow two competing models to generate the inputs needed to formulate and implement strategies. Chapter 2 focused on the external environment, which is the foundation of the I/O model. The emphasis in Chapter 3 is on internal resources and their potential to create competitive advantage for the firm, which falls in line with the resource-based model. This orientation is perhaps best captured by the elements of Figure 3.1 , which should be emphasized. However, it should also be emphasized that no competitive advantage lasts forever and, over time, any firm’s value-creating strategy can be duplicated. OPENING CASE Apple Defies Gravity with Innovative Genius Apple recorded record sales in 2008, during the midst of a global recession. These results are largely attributed to its capabilities in creating new innovations. Apple continues to use these capabilities to upgrade several of its products (laptops, phones, iPod) and several analysts expect sales to increase over the next several years. An example of Apple’s innovation can be seen in the iPod Shuffle introduced in 2009. The product is smaller than a double-A battery and can store approximately 100 songs in 14 different languages....
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This note was uploaded on 10/21/2011 for the course ACCOUNTING 101 taught by Professor Fenjimo during the Spring '11 term at College of Southern Idaho.
- Spring '11