6. Strategic capability Flashcards
What does internal analysis consist of?
- Critical success factors and competences
- Resources
- Value chain
- Supply chain
- Product/service portfolio
Define critical success factors (CSFs).
Are a small number of key goals vital to the success of an organisation ie, ‘things that must go right’.
According to MIT, what are five areas in which CSFs should be identified?
- The structure of the particular industry
- Competitive strategy and position
- Environmental factors
- Temporal factors
- Functional managerial position
What are the factors needed to achieve a sustainable competitive advantage (SCA) over competitors?
No SCA:
- Threshold resources
- Threshold competencies
SCA:
- Unique resources
- Unique competencies
According to Kay, what are the three sources of core competencies?
- Competitive architecture
- Internal architecture – relationships with employees.
- External architecture – relationships with suppliers, intermediaries and customers.
- Network architecture – relationships between collaborating businesses.
- Reputation
- Innovative ability
What is a resource audit?
A resource audit catalogues the assets by considering physical resources, intangibles, human resources, technological resources and financial resources.
What are factors that need to be considered when auditing physical resources?
- Physical assets should be audited reviewing how cost-effectively they are used.
- Inventories and working capital are also resources, but they have to be financed.
- Raw materials
- Limiting factors
What does an audit of human resources typically include?
- Headcount
- Skills base
- Culture
- Workforce structure
- The right mix of labour and capital
- Service levels
- Intellectual property and knowledge
What are some practical ways to enhance human capital?
- Education and training
- Allowing creativity
- Infrastructure
- Recognising the intellectual property within the workforce
- Motivation
- Competition
- Participation in activities
- Workforce flexibility / Flexible workplace arrangements / Home working
Define crowdsourcing and crowdfunding.
- Crowdsourcing: The process of getting work or funding, usually online, from a network of people
- Crowdfunding: Is a way of raising finance by asking a large number of people for a small amount of money
What are the Vs of Big Data?
Volume
Velocity
Variety
Veracity
What are some practical considerations regarding Big Data?
- Are there workers within the organisation or in the job market with the required skills capable of analysing large data sets?
- Storing vast quantities of data places a greater emphasis on organisations having robust data security measures in place.
- Does the organisation have the financial resources and time available to invest in or upgrade IT/IS?
- Furthermore, the issue of data ownership is likely to present challenges for organisations, ultimately who owns the data held?
Define intelligent system?
A computer-based system that can represent, reason about, and interpret data. In doing so it can learn about the structure of the data, analyse the data to extract patterns and meaning, derive new information, and identify strategies and behaviours to act on the results of its analysis
What are some key considerations involving the effective use of developing technologies?
- Impact on human resources
- Costs
- Speed of change and competitive advantage
- Impact on customers
Define Digital assets.
Assets which are held in digital form, that is to say assets which are not available in physical form. Common examples of digital assets include: PDF files, images, audio and video files.
What are some features of digital asset management systems?
- Digital assets are saved centrally to avoid the need for multiple network locations;
- Access rights can be set so that only individuals with appropriate authorisation can access and amend digital content;
- Digital assets can be saved according to their file type which is designed to support ease of use;
- A search function which allows users to search for digital assets in the event that the asset name cannot be recalled (ie the file name)
- Many digital asset management systems are integrated with cloud-based technologies so that the organisation’s digital assets can be securely stored and can be accessed around the world.
What are some practical issues that need to be considered when implementing a digital asset management strategy?
- Infrastructure capabilities and storage needs
- Management support
- Selection of supplier
- Project team
Define cryptocurrency.
A form of decentralised, digital currency, designed to facilitate the virtual exchange of transactions. Cryptocurrency is encrypted through the use of cryptography.
Cryptocurrencies allow users to pay for items purchased online, and to receive payments in anonymity.
Unlike traditional currencies, cryptocurrencies are not controlled by a central banking mechanism, and as such the value of cryptocurrencies has been known to fluctuate dramatically.
What are the 9Ms in the 9Ms model to summarise the resources and sources of competences to be evaluated?
- Machinery
- Make-up
- Management
- Management information
- Markets
- Material
- Men and women
- Methods
- Money
What are the bases of benchmarking?
- Internal benchmarking
- Competitive benchmarking
- Activity (or best in class) benchmarking
- General benchmarking
What is Porter’s value chain?
Porter’s value chain encourages management to perceive of the business as a sequence of activities that add value to inputs so that the final good or service shall command a profitable price on the market.
What are the crucial activities that sustain competitive advantage, according to Porter?
The crucial activities that sustain competitive advantage are called cost drivers and value drivers.
Competitive advantage can be created and sustained by linkages in the value chain which help to co-ordinate and optimise activities.
What is the value chain process?
Inputs from suppliers –> Value - creating activities (Firm) –> Outputs to customers
What are primary activities in Porter’s value chain?
Primary activities relate to production, sales, marketing, delivery and service, in other words anything directly relating to the process of converting resource inputs into outputs.
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- After sales service
What are support activities in Porter’s value chain?
Support activities provide purchased inputs, human resources, technology and infrastructural functions to support the primary activities.
- Procurement
- Technology development
- Human resource management
- Management planning and firm infrastructure
What are the role of Linkages in VCA?
Activities in the value chain affect one another. Linkages connect the activities in the value chain.
They have two roles.
- They optimise activities by enabling trade-offs.
- Linkages reflect the need to co-ordinate activities.
What is the value system?
A firm’s value chain is connected to what Porter calls a value system, ie, activities that add value that extend beyond the organisation’s boundaries.
What are the uses of the Value Chain in strategic planning?
- Identify strategically significant activities (the value activities) as an aid to targeting capital investment.
- Compare with the value chains of competitors, to identify sources of differentiation.
- Identify opportunities for synergy between the firm and a potential acquisition
- Assist managers in identifying competitive forces in the system, and targeting potential
vertical integration prospects.
What are the issues to be considered in whether to outsource?
- The firm’s competence in carrying out the activity itself.
- Whether risk can be managed better by outsourcing
- Whether the activity can be assured and controlled
- Whether organisational learning and intellectual property is being transferred.
What are the issues to be considered in deciding whom to outsource?
- The track record of the provider and its experience of similar partnerships.
- The quality of relationship on offer
- The strategic goals of the provider
- The economic cost of using them
- Their financial stability.
Define the Harmon’s process-strategy matrix.
Is used in the analysis of business processes. It assesses the strategic importance of a process as well as its complexity and dynamics to determine how that process should be managed.
- Low process complexity/dynamic and low strategic importance: Automate/outsource
- Low process complexity/dynamic and high strategic importance: Automate
- high process complexity/dynamic and low strategic importance: Outsource
- high process complexity/dynamic and high strategic importance: Improve
Define shared service centre.
A number of internal transaction processing activities which had previously been conducted in a number of different departments, or business units, are brought together into one site within an organisation.
Shared service centres provide large organisations with an alternative to outsourcing activities.
What are the advantages of shared service centres?
- Cost savings from reduced headcount and the realisation of the associated economies of scale resulting from operating from a single location.
- Knowledge between those based in the shared service centre can be more easily shared than when activities were embedded in different parts of the organisation.
- The use of standard processes by shared service centres ensures that all departments or business units in receipt of these services are treated consistently.
What are the disadvantages of shared service centres?
- Department or business specific knowledge may be lost.
- Closely connected to the previous point is that staff based in shared service centres are often removed from the day-to-day realities facing the departments or business units that they serve.
- The physical distance between the shared service centre and the business areas that it serves may weaken the relationships that exist between the two.
Define supply chain management (SCM)
The management of all supply activities from the suppliers to a business through to delivery to customers. The main themes are:
- Responsiveness
- Reliability
- Relationships
What technology applications have facilitated SCM?
- Email.
- Web-based ordering and tracking.
- Electronic data interchange (EDI) of invoices and payments, ordering and sharing of inventory information.
- Satellite systems able to track positions of trucks.
- Radio data tags fixed to pallets or boxes of valuable items to enable them to be located in the supply chain (including within a warehouse).
This has led to:
• Reductions in costs.
• Better outsourcing opportunities.
• Increased product and service innovation.
• Mass-customisation of products: ie, customised products made by mass production methods, eg, Dell computers, superior car marques.
What does supply chain management involve?
Supply chain management involves optimising the activities of companies working together to produce goods and services. It can involve the following:
• Closer partnership relationships with a reduced number of suppliers.
• Reduction in customers served
• Price and stock co-ordination
• Linked computer systems
• Early supplier involvement in product development and component design.
• Logistics design
• Joint problem solving among supply chain partners.
Supplier representative on site.
Define network architecture.
The network of relational contracts, within or around, the firm.
A relational contract contains parties doing business with each other in a long term relationship.
Networks can be both internal and external.
Drivers of collaboration strategies that result in network arrangements can be characterised as follows:
- Blurring of market boundaries
- Escalating customer diversity
- Skills and resource gaps
Define asset specificity.
Where investments are made to support the relationship which have the effect of locking parties into a relationship to some degree.
What are the types of possible relationships between firms in a network?
- Outsourcing
- Partnership
- Alliance
- Ownership
What factors should be considered when choosing alliance partners?
- Drivers
- Partners
- Facilitators
- Components
- Effectiveness
- Market-orientation
What is the BCG matrix?
The Boston Consulting Group matrix (BCG matrix) is a technique to assist management to visualise their portfolio and to manage it to improve the financial performance of the corporation as a whole.
- Low % rate of market growth and low relative market share: Dog
- Low % rate of market growth and high relative market share: Cash cow
- High % rate of market growth and low relative market share: Question mark
- High % rate of market growth and high relative market share: Star
Stars: High growth rates will however attract newcomers/competition.
Cash cows: Low growth make attacks by new firms wishing to enter the market unlikely.
