02 Strategic Positioning: Outside-in & Inside-out Analyses

Question 1

Paths to competitive advantage: Outside-in vs Inside-out

Answer 1

External Analysis:
- Industry Boundaries
- Opportunities vs Threats
- Environmental Models of Competitive Advantage

Internal Analysis:
- Firm Boundaries
- Strengths vs Weaknesses
- Resource-Based Models of Competitive Advantage

Question 2

(OI) Outside-In - Layers

Answer 2

Question 3

(OI) PESTEL (Macro Environment Analysis)

Answer 3

Question 4

(OI) The macro-environment: Relevance of the political dimension

Answer 4

Question 5

(OI) PESTEL Application

Answer 5

Question 6

(OI) Porter’s Five Forces Framework

Answer 6

Question 7

(OI, P5) Competitive Rivalry

Answer 7

cf. Apple vs Samsung

Question 8

(OI, P5) Suppliers: Bargaining Power of Suppliers

Answer 8

cf. Football players

Question 9

(OI, P5) Buyers: Bargaining power of buyers

Answer 9

cf. Power of Airline Customers (Buyers) towards Airlines

Question 10

(OI, P5) Substitutes: The threat of substitutes

Answer 10

Question 11

(OI, P5) New entrants: The threat of entry

Answer 11

Question 12

(OI, P5) Challenges of using the Five-Forces model

Answer 12

Question 13

(OI, P5) A dynamic view: The industry life cycle

Answer 13

Question 14

(OI) Market & Customer Segment

Answer 14

Def.: group of customers w/ similar needs different from customer needs in other parts of the market

Question 15

(OI, CM) Digital natives enter traditional industries –> Consequence?

Answer 15

Question 16

(IO) Inside-Out Analysis – Framework

Answer 16

competitive advantages and better performance of an organization can be explained by the uniqueness of the resources and competencies of an organization

Question 17

(IO) Resources vs Capabilities

Answer 17

Question 18

(IO) VRIO Concept

Answer 18

Capabilities…

1. Value:
   … create product/service of value to customers + higher revenues and/or lower costs
2. Rare
   … possessed uniquely by one organization or by few others
3. Inimitable
   … competitors find difficult and costly to imitate/obtain/substitute
4. Organisation…
   … must be suitably organised to support these capabilities

Question 19

(IO VRIO) Criteria for the inimitability of competencies

Answer 19

Question 20

(IO VRIO) From capability to core competence: the VRIO concept

Answer 20

Question 21

(IO DC) Dynamic Capabilities (Def.)
& The 3 Generic Types of Dynamic Capabilities

Answer 21

• Def.: An organization’s ability to renew & recreate its resources + capabilities to meet the needs of changing environments

Question 22

(IO VC) Value Chain (Def.) & Value Chain Model (Arrow)

Answer 22

• Def.: Describes the categories of activities within & around an organisation that together create products or services

Question 23

(IO VC) What to use the value chain for?

Answer 23

1. Generic description of activities
2. Analysing the competitive position of the organisation using the VRIO criteria
3. Analysing the cost and value of activities of an organisation
   
   • Crucial value activities
   • Cost versus strategic impact
   • Where and how can costs be reduced?

Question 24

(IO AS) Activity Systems (Def.)

Answer 24

• Def.: describe the way in which an organisation meets the critical success factors that determine the industry and lead to success

(cf. IKEA example)

Question 25

(IO VS) The Value System/Network

Answer 25

Question 26

(IO E) Ecosystems (a)

(Market-Based Value System & Hierarchy-Based System)

Answer 26

Question 27

(IO E) Ecosystems (b)

(Ecosystem-Based Value System)

Answer 27

Def.
Ecosystem = set of actors w/ varying degrees of multilateral, non-generic complementarities that are not fully hierarchically controlled

Pros:
- Multiple actors contributing towards the focal firm’s value proposition
- (Economic) complementarities between actors: functions performed by their offers create or enhance the user value proposition
- (Structural) interdependencies between actors: Connections between their offers for the value proposition to materialize

Question 28

(IO E) Managing Ecosystems - 5 Questions

Answer 28

Question 29

SWOT Analysis (Integration of Forces)

Answer 29