5. Strategic position: internal analysis Flashcards
What is the main basis of competencies?
Resource-led view, that is, competitive advantage based on an unique combination of resources and capabilities.
Strategic capability:
Strategic capability is the adequacy and suitability of the resources and competencies of an organization for it to survive and prosper.
Tangible resources:
Tangible resources are the phisical assets of an organization such as plants and tools.
Intangible resources:
Intangible resources (e.g. intellectual property and brand) are non-phisical assets such as information, reputation and knowledge.
What are the 4 categories of resources?
-Physical resources (location, land)
-Financial resources (cash, access to credit)
-Human resources (skills, mindset)
-Intelectual property
What are competences?
Competences are activities and processes through which an organization deploys its resources effectively.
Definition and examples of capability
Resources = What we have vs. what we do well
-Physical: Machines vs. ways to use them efficiently
-Financial: Cash vs. how to invest it properly
-Human: Employees vs. how to leverage their knowledge
Value Chain analysis:
The value chain analysis identifies clusters of resources and activities providing particular benefits to customers.
It also identifies activities that are less efficient and which might be outsourced or outright de-emphasized.
Analytical proceeding (Which strategy a company should pursue):
In order to analyze strenghts and weaknesses, a (general) internal analysis should be done. After that analysis, it must be discussed if the company should pursue a differentiation or cost-leadership strategy.
VRIO analysis:
It determines the value of resources and capabilities.Stat
Value (VRIO):
Strategic capabilities are of value when they capitalize on opportunities and neutralize threats. They are also valuable when they benefit customers and deliver good ROIC.
Rarity (VRIO):
Rare capabilities are those that are uniquely possessed by an organization or by a fes others (patents, talented people and a strong brand).
Inimitability (VRIO):
Inimitable capabilities are those that competitors find difficulties and expenses to imitate, maintain or replace. Additionally, sustainable advantages are more often found in competences (how resources are managed, developed and deployed) and how competences are linked and integrated.
Organizational support (VRIO):
The organization must be properly organized to support the valuable, rare and inimitable capabilities it possesses. This includes appropriate processes and systems.
Customer satisfaction analysis:
Customer surveys can be a good basis for quantitative indication for strenghts and weaknesses. If done regularly, the development and successes can be tracked.
Example: Net promoter score method
