Chapter 5 - Strategic capability

Question 1

Define strategic capability

Answer 1

The adequacy and suitability of its resources and competences

Question 2

Define threshold competences

Answer 2

Activities and processes needed to meet minimum customer requirements

Question 3

Define threshold resources

Answer 3

Resources needed to meet minimum customer requirements

Question 4

Define core competences

Answer 4

Activities and processes through which competitive advantages are achieved

Question 5

Define unique resources

Answer 5

Resources that underpin competitive advantage and that others cannot easily imitate.

Question 6

Define competitive advantage

Answer 6

Ability to generate greater returns than those of competitors over long term

Question 7

What are the four qualities that resources and competences must have for competitive advantage to be achieved?

Answer 7

VIRO

• Value - placed by customer
• Inimitability - competitors cannot imitate
• Rarity - competitors less likely to have access
• Organisational support - support the capabilities through resources

Question 8

Define dynamic capabilities

Answer 8

The ability to develop and change competences in response to changing environments.

Question 9

Define knowledge management

Answer 9

Exploiting existing knowledge to create new knowledge so that it may be exploited in turn.

Question 10

What is Porter’s value chain?

Answer 10

A framework for assessing the strategic capabilities of an organisation and how its activities add value.
The margin is the excess the customer is prepared to pay over cost to firm.

Question 11

What are the primary activities of Porter’s value chain?

Answer 11

• Inbound logisticsv - receiving, handling, storing inputs
• Operations - converting resource into final product
• Outbound logistics - storing and distributing to customer (packaging, testing)
• Marketing and sales - informing customer
• After sales service

Question 12

What are the support activities of Porter’s value chain?

Answer 12

• Firm infrastructure - planning, quality control, structures
• Technological development - product design, improve process
• Human resources management - recruiting, training, rewarding
• Procurement - acquiring resource inputs

Question 13

What is a value network?

Answer 13

Linkages with the value chains of suppliers and customers - inter-organisational links

Question 14

What does SWOT analysis do?

Answer 14

Summarises the key issues from the business environment that are most likely to impact strategy