Creating Competitive Advantage:
1.Core competencies, in combination with product-market positions, are the firm’s most important sources of competitive advantage.
2.Core competencies of a firm, in addition to its analysis of its general, industry, and competitor environments, should drive its selection of strategies
The Challenge of Analyzing the Internal Organization:
- Strategic decisions in terms of the firm’s resources, capabilities, and core competencies:
1).Are non-routine.
2). Have ethical implications.
3).Significantly influence the firm’s ability to earn above-average returns.
- When making strategic decisions, managers as strategic leaders must:
1).Know when a capability is not a competence.
2).Learn quickly from failures and mistakes.
3).Have the maturity of judgment to deal effectively with uncertainty, complexity, and intraorganizational conflicts in an unbiased manner.
4).Be willing to take intelligent risks.
Resources
1.Are the source of a firm’s capabilities.
2.Are broad in scope.
3.Cover a spectrum of individual, social and organizational phenomena.
4.Alone, do not yield a competitive advantage.
Resourse:
Are a firm’s assets, including people and the value of its brand name that represent inputs into a firm’s production process:
1).Capital equipment.
2).Skills of employees.
3).Brand names.
4).Financial resources.
5).Talented managers
Types of Resources:
1.Tangible resources
1).Financial resources.
2).Physical resources.
3).Technological resources.
4).Organizational resources.
2.Intangible resources.
1).Human resources.
2).Innovation resources.
3).Reputation resources.
Capabilities
1.Represent the capacity to deploy resources that have been purposely integrated to achieve a desired end state.
2.Emerge over time through complex interactions among tangible and intangible resources.
3.Often are based on developing, carrying and exchanging information and knowledge through the firm’s human capital.
4.The foundation of many capabilities lies in:
1).The unique skills and knowledge of a firm’s employees.
2).The functional expertise of those employees.
5.Capabilities are often developed in specific functional areas or as part of a functional area.
Core Competencies
1.Resources and capabilities that are the sources of a firm’s competitive advantage:
1).Distinguish a firm competitively and reflect its personality.
2).Emerge over time through an organizational process of accumulating and learning how to deploy different resources and capabilities.
2.Activities that a firm performs especially well compared to competitors.
3.Activities through which the firm adds unique value to its goods or services over a long period of time.
Building Core Competencies:
The Four Criteria of Sustainable Competitive Advantage:
1.Valuable capabilities.
2.Rare capabilities.
3.Costly to imitate.
4.Nonsubstituable
