Internal Analysis

Question 1

Understanding Firms

Answer 1

A firm is a bundle of resources under common ownership/ governance. The firm needs core competencies to obtain and sustain competitive advantage

Question 2

Resources

Answer 2

Tangible:
> Financial
> Organizational - reporting structures
> Physical
> Tech

Intangible
> Human Resource
> Innovation
> Reputation

Question 3

Core Competencies

Answer 3

The ability to bundle resources in a valuable way determines the firm’s strength vs its rivals. Success does not come from products but this bundling.

The more intangible the more sustainable

Question 4

Capabilities

Answer 4

Represent capacity to deploy resources that have been purposely integrated to achieve the desired end state.

They emerge over time and among interactions between tangible and intangible resources.

They are composed of a unique set of skills and knowledge from employees and thereby include the expertise from employees.

Resources > Capabilites > Core Compentencies > Competitive Advantage

Question 5

Internal Analysis - Value Chain and Identifying Core competencies

Answer 5

1. Identify Value Chain activities
   > primary (physical creation, sales, and distribution to buyers and service after sales)
   > secondary (HRM, Tech development, Procurement)
2. Identify Strength and Weaknesses
3. Analysis of whether those strengths have implications for competitive advantage (VRIN Framework)
4. Strategic implications of your analysis
   > Weaknesses - able to overcome myself or outsource?
   > Strengths - how to extend competitive advantage

Question 6

VRIN Framework

Answer 6

NNNN - Disadvantage
YNNN - Parity
YYNN - Temporary Advantage
YYYY - Sustainable Advantage

Question 7

Outsourcing

Answer 7

Purchase of value-creating activity from external supplier

> Outsource where you have a disadvantage compared to your competitor
Can increase flexibility
but strengthen buyer-supplier relationship (5 forces)