What do we mean by Resources?
- Anything that can be thought of as a Strength or Weakness of a firm (Wernerfelt, 1984)
- A bundle of assets, capabilities, organisational processes, firm attributes, information and knowledge (Barney, 1991)
How do we perform Internal Analysis? (Internal Analysis Process)
1) Determine Resources, Assessment of current performance (strengths & weaknesses), Portfolio analysis
then
2)Strengths & Weaknesses
then
3)Assess against external environment, vision and intent to determine strategic options
Assets
the resource endowments that the organisation has built over time such as those resulting from investments in scale, plant, location and brand
Capabilities
- The processes enabling the assets to be deployed to the company’s advantage
- Core capabilities are important to creating CA and typically involve the bundling together of other capabilities
Dynamic capabilities
- Capabilities that create new assets and or capabilities in response to changes in the marketplace
- “The firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments” Teece (1997)
Dynamic Marketing Capabilities
Dynamic Marketing Capabilities are the ability to create new marketing resources to identify, respond to and exploit change
Absorptive capabilities (Dynamic Marketing Capabilities)
Understanding what is happening in external market, generating and modifying routines
Adaptive capabilities (Dynamic Marketing Capabilities)
Identify & capitalise on emerging market opportunities and capture new customers
Innovative capabilities (Dynamic Marketing Capabilities)
Ability to innovate and develop new products/services
Resource example - Zara
- Dynamic Capabilities: Market sensing - Established processes for quickly capturing and communicating feedback
- Core Capabilities: Responsiveness to customers
-Capabilities: Advanced information systems capability
Just In time production and stock control processes
In-house design and production
-Assets: Network of independent suppliers
Strong fast fashion brand
Network of stores in prime locations with high level of technology
Strong financial position
Comparing the performance of a business component with others is called
benchmarking. The goal is to generate specific ideas for improvement, and also to define standards at which to aim”
Portfolio Analysis – BCG Matrix
“Business portfolio analysis provides a structured way to evaluate business units on two key dimensions: the attractiveness of the market involved and the strength of the firms position” - Aaker and McLoughlin (2007:123)
VRIO for Competitive Advantage
Value, Rareness, Imitability, Organization
VRIO is used to assess the situation inside the organization (enterprise) - its resources, their competitive implication and possible potential for improvement in the given area or for a given resource.
Core competencies have three characteristics:
- Makes significant contribution to customer-perceived value
- It has applications in a wide variety of markets
- It is difficult for competitors to imitate
Core Rigidities
“Capabilities can act as liability and that in certain situations (e.g., in dynamic environments) they can act as rigidities that keep firms from adapt and acting in ways that might be beneficial.” Barton, 1992
Sticky Resources
“For a Barnes and Noble, its allocation of resources and the capabilities and the culture and the people that it has hired are all extremely sticky; it can’t really turn the ship around all that easily and certainly not very quickly. That’s what I mean by sticky resources..” Prof. Anil K Gupta,
The Transformational Leadership Style
- Often identified as the single most effective style
- Focused on leaders’ ability to motivate and inspire followers and to direct positive changes in groups.
The Transactional Leadership Style
- Typically involves the employer-employee relationship. The transaction focuses on the follower completing required tasks in exchange for monetary compensation.
- Creates clearly defined roles and motivates employees to receive rewards and also allows leaders to offer a great deal of supervision and direction
- However, can stifle creativity and out-of-the-box thinking.
Situational Leadership Styles
-Situational theories of leadership stress the significant influence of the environment and the situation on leadership
FINISH AFTER SLIDE 17
FINISH AFTER SLIDE 17
What are Core Competencies
- Make significant contribution to customer-perceived value.
- it has application in a wide variety of markets
- it is difficult for competitors to immitate
Power Culture (Handy’s 4 cultural types)
Dominance of an individual / small group who makes the key decisions and delegate tasks/responsibilities
Limited opportunity for employees to be heard
Role Culture (Handy’s 4 cultural types)
Bureaucratic with clear role hierarchy
Rules based
Strong organisational pillars
Task Culture (Handy’s 4 cultural types)
Individuals, often with mixed specializations are organized into teams to address particular projects
