RBV 2-4-07 - Identifying Resource Strengths and Competitive...

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1 TODAY’S TOPIC Industry Analysis Competitive Dynamics Industry Evolution Macro- Environmental Analysis Resource-based view Positioning Relative to Customers Defending Against Rivals Expanding the Boundaries of the Firm Make vs. Buy Decisions Partnerships Expanding the Boundaries of the Firm Make vs. Buy Decisions Partnerships Expanding the Scope of the Firm Diversification: -M&A’s - Forms of Diversification STRATEGIC MANAGEMENT INTERNAL ANALYSIS EXTERNAL ANALYSIS Functional Level Strategy Business Level Strategy Corporate Level Strategy z A strength is something a firm does well or an attribute that enhances its competitiveness z Valuable skills, competencies, or capabilities z Valuable physical assets z Valuable human assets z Valuable organizational assets z Valuable intangible assets z Important competitive capabilities z An attribute placing a company in a position of market advantage z Alliances or cooperative ventures with partners Resource strengths and competitive capabilities are competitive assets! Identifying Resource Strengths and Competitive Capabilities Identifying Resource Weaknesses and Competitive Deficiencies z A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage z Resource weaknesses relate to z Inferior or unproven skills, expertise, or intellectual capital z Lack of important physical, organizational, or intangible assets z Missing capabilities in key areas Resource weaknesses and deficiencies are competitive liabilities! Competencies vs. Core Competencies vs. Distinctive Competencies z A competence is the product of organizational learning and experience and represents real proficiency in performing an internal activity z A core competence is a well-performed internal activity central (not peripheral or incidental) to a company’s competitiveness and profitability z A distinctive competence is a competitively valuable activity a company performs better than its rivals z Stem from skills, expertise, and experience usually representing an z Accumulation of learning over time and z Gradual buildup of real proficiency in performing an activity z Involve deliberate efforts to develop the ability to do something, often entailing z Selecting people with requisite knowledge and skills z Upgrading or expanding individual abilities z Molding work products of individuals into a cooperative effort to create organizational ability z A conscious effort to create intellectual capital Company Competencies and Capabilities Core Competencies – A Valuable Company Resource z A competence becomes a core competence when the well-performed activity is central to a company’s competitiveness and profitability z Often, a core competence is knowledge-based, residing in people, not in assets on a balance sheet z A core competence gives a company a potentially valuable competitive capability and represents a definite competitive asset
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2 Examples: Core Competencies z
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RBV 2-4-07 - Identifying Resource Strengths and Competitive...

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