3 - The Internal Organization: Resources, Capabilities, Core Competencies and Competitive Advantages Flashcards
topics in analyzing the internal organization (IO)
context of internal analysis (analysis of firm portfolio of resources + capabilities)
- important to have global mindset
creating value (develop core competencies = lead to CA)
challenge of analyzing IO
challenge of analyzing IO
strategic decisions:
- are non-routine
- have ethical implications
- influence AAR
- complex
managers face uncertainties
intra-organizational conflict (regarding decisions about core competencies)
competitive advantage foundation includes
resources (tangible + intangible) - allow for creation of value
capabilities
core competencies (capabilities that serve as source of CA)
tangible vs intangible resources
tangible resources
- financial
- organizational
- physical
- technological
intangible resources (valuable = harder to imitate)
- human
- innovation
- reputational
tools to identity + build on firm’s core competencies
- VIRN criteria for sustainable CA
2. value chain analysis
value chain analysis
identify value creating activities
primary activities: involved w/ physical creation, sales, distribution + service
- ex: marketing, operations, logistics…
support activities: assist the primary activities
- ex: firm infrastructure, HRM, tech…
what happens when a core competencies emphasized are no longer relevant?
can become a weakness (no value)
= core rigidities
outsourcing
considered when the firm cannot create value in either a value chain activity or a support function
- used commonly in global economy
capabilities
- integration of tangible + intangible resources
- if VIRN = core competencies (ultimately CA)
importance of analyzing strengths and weaknesses
- to see which resources are needed
- check if alternatives (ex: outsourcing) are needed
- eliminate core rigidities
