- what is inside the firm?
core competencies
resources
capabilities
they are key to competitive advantage creation & sustainability
- Core Competencies
allow firm’s ability to gain & sustain competitive advantage by differentitating its products & services from rival, creating higher value for the customer & offering products ate lower costs
they are unique strengths embedded deep within the firm
must be constantly nourished
- resources
any asset that a firm can draw on when formulating or implementing a strategy
tang or intang
reinforces core competencies
- capabilities
organizational & managerial skills necessary to deploy a diverse set of resources
intang
orchestrate core competencies
- activities
distinct & fine-grained business processes that enable firms to add incremental value by transforming inputs into goods & services
core competencies leverage activities
- RBV (resource-based view) - key assumptions
- resource heterogeneity
bundles of resources capabilities & competencies differ across firms - resource immobility
resources do not move easily from firm to firm “stickiness”
- types of resources
- physical
- human resources (recruiting skills, employer s experience)
- intellectual property (patents, trademarks, copyrights, trade secrets)
- organizational/ intangible (corporate culture, idiosyncratic to firms & very hard to imitate, brand loyalty)
- VRIO Framework
is the resource/cap/compe …
- valuable? - no - competitive disadvantage
- rare? - no - competitive parity
- Imitation costly? - no - temporary competitive advantage
- Organized to capture value? - no - temporary competitive advantage
YES to all: sustainable competitive advantage
- How to sustain competitive advantage?
- better expectations of future resource valu
- intellectual property protection
- social complexity
- causal ambiguity
- path dependence (decisions made in past limit options one faces - time compression diseconomies)
- Value chain
primary activities & support activities
- the internal activities a firm engages in when transformings inputs into outputs
- each activity adds incremental value & incremental costs
- strategic activity systems
- firm as a network of interconnected activities that can be the foundation of its competitive advantage
- hard to imitate
- evolve over time if a firm is to sustain competitive adv
- in response to changing environment firms need to upgrade value-creating activities & adopt their activity system
- SWOT analysis
understand what to get out ot each combination of pairs.
