Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chap 3
The internal Org (Value chain Analysis (Firm only earns Abv Avg…
Chap 3
The internal Org
-
By analyzing internal orgs, a firm determines what it can do. Matching what it can do and what it might do (opportunities, threats etc) yields insights that allows a firm to select strategies
-
Resources, Capabilities and Core Competencies
-
Intangible - rooted deep in a firm's history and accumulate over time - difficult for competitors to analyze and imitate
-
eg. Culture, trust, reputation etc
primary categories
Reputational resource
-
-
+Ve reputation with stakeholders (suppliers, customers, community etc)
-
-
-
more reliable since diff to imitate - the more unobservable, the more valuable
-
- Resources form capabilities, which form core competencies, which form competitive advs
-
Core competencies
- Capabilities that serve as a source of competitive adv for a firm over its rivals.
Criterion
-
-
Costly to imitate
-
Casual ambiguity - difficult to understand what capabilities make competitive adv possible (but since firm might itself not know, diff to measure and improve)
-
-
-
-
Value chain Analysis
- Firm only earns Abv Avg returns when value created is greater than costs incurred to create that value
- Value chain activities- tasks firm complete to produce, sell, distribute and service in a way that creates value
- Support functions - Includes work being done to support value chain activites (ie. HR, Finance etc)
- A firm can develop core competencies in any of the activities in the value chain or support functions - those are not to be out sourced
- To become a source of competitive adv - a capability must either provide value competitors cannot match or provide at all
- Comparisons should be done at the global scale given our current global economy
- Where value chain or support activity not source of core competence - one option is to out source
Outsourcing
-
-
Mitigates risk, gives flexibility, allows to focus
-
-
Therefore, firms try to nurture resources that have competitive parity (Valuable but imitable) while preparing core competencies