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AMM-M4- Resources and Capabilities (Foundations (Resources: what we have …
AMM-M4-
Resources and Capabilities
Foundations
Resources: what we have
Capabilities: what we do well
Threshold resources and capabilities (qualifiers):
those needed for an organization to meet the necessary requirements to compete in a given market and achieve parity with competitors in that market
The resource and capabilities contribute to its long-term survival and potentially to competitive advantage
Distinctive capabilities (winners):
that are required to achieve competitive advantage
are of value to customers and that competitors find difficult to imitate
Core competences: are together
deliver customer value
differentiate a business from its competitors
potentially can be extended and developed as markets change or new opportunities arise
Criteria - VRIO
V - value
valued by customers and
provide potential competitive advantage
R - rarity
I - inimitability
barriers to imitation: organisation in linkages between activities, skills and people (on the basis of capabiities)
capobilites tend to involve more intangible imitation barriers compared to physical assets
Complexity
internal linkages: developed on the basis of custom and practice built up over years and is specific to the organisation concerned, e.g. IKEA
external interconnectedness
Casual ambiguity: difficult to discern the causes and effects
characteristic ambiguity
linkage ambiguity
Culture and history
taken-for-granted activities
path dependancy
O - organisational support
the O must be suitable organised to support these capabilities
the structure and management control systems need to support and facilitate their exploitation
Diagnosing resources
and capabilities
VRIO analysis
Competitive implications:
competitive disadvantage
competitive parity
temporary competitive advantage
sustainable competitive advantage
The value chain and value system
A value chain describes the categories of activities within an organisation which, together, create a product or service
A value system describes
Value chain usage to understand the strategic position of a firm:
A generic description of activities
- understanding how the discrete activities (or clusters of linked activities) contribute to customer benefit.
Identifying activities
where the organisation has particular strengths or weaknesses.
Analysing the competitive position
of the organisation using the
VRIO criteria – thus identifying sources of sustainable advantage.
Looking for ways to
enhance value or decrease cost
in value
activities (e.g. outsourcing).
Value system usage; built on the understanding of one's value chain
The 'make or buy' decision
What are the activities and cost/price structures? analysing the best area of focus and the best business model
Where are the 'profit pools'? (i.e., the levels of profit in different parts of the system) - seeking ways to use existing capabilities in order to exploit these.
Activity systems
Benchmarking
SWOT
Dynamic capabilities
Innovation
Innovation dilemma
Technology push or market pull
Product or process innovation
Open or closed innovation
Dynamic capabilities:
are the ability to renew and recreate its strategic capability to meed the changing environments
Generic dynamic capabilities:
sensing
seizing
reconfiguring
The resource-based view (RBV)/ Capabilities view
-superior performances are explained by the distinctiveness of its capabilities