6. Strategjc Capability Flashcards
What are critical success factors
Those things in an organisation that must be done well for it to suceed.
Key performance indicators
A numerical expression of something that can be measured, demonstrates an achievement of a CSF
- KPI must be a target or benchmark to compare against
Explain threshold capibilities
Threshold resources - basic resources needed by all firms in the market e.g. paper in a newspaper firm
Threshold competences - The activities and processes involved in using and linking the firms resources necessary to stay in business
Explain strategic capibilities
Unique resources - Resources that give the firm a sustainable competitive advantage over its competitors, enabling it to meet its CSFs
Core competences - critical activities and processes that enable the firm to meet its CSFs and therefore achieve a sustainable competitive advantage.
What are Kay’s three sources - core competences?
• Competitive architecture - network of relationships within a business
- help create core competences.
- Take time to build.
- Broken down into internal (employee relationships), External (suppliers, customers), network (between businesses)
• Reputation - why customers come back, investors invest etc
- Takes years to create
• Innovative ability - ability to develop new products and services and maintain a competitive advantage.
Benchmarking
Determined a particular standard against which an activity or department can be measured through KPIs
Bases for benchmarking
• Internal - historical or budgetary comparison that considers performance over time
• Competitive - comparison with competitors in same industry or sector
• Activity - comparison directly with best practice inter-industry (aircraft refuelling with F1 pit team )
• Generic - benchmarking against a conceptually similar process
What is a resource audit
Review of strategic capability. Covers physical resoures, intangibles, HR, tech, finance
What are 9ms
Checklist of resources:
• Men and women - availability, cost, culture
• Money - availability of capital, liquidity
• Machinery - physical assets, capacity
• Materials suppliers - innovation, price, quality
• Markets - distribution, how/where we sell, customer relationships
• Management - general competence of board
• Methods - processes used and intellectual property e.g. patents/brands
• Make-up - organisation structure/culture
• management info systems - strategic use of IT
What is Limiting factor? ST vs LT?
a factor which may limit activity of an entity, often occuring where there is a shortage or difficult of availability.
ST- likely materials/labour/Managerial capability
LT - company should: Reufce shortfall by obtaining more of resource, and economise on use by reconsidering activities that consume the resource
What is the value chain ?
- A way of visualising an organisation
- consisting of primary activities
- work to produce the output and earn profit.
- Underpinned by support activities, which don’t add to margin but enable primary to work efficiently
What are the primary activities ?
• Inbound logistics - Receiving, handling and storing inputs to the production system.
• Operations - Convert resource inputs into a final product or service. Materials/resources (includes people)
• Outbound logistics - storage of product and distribution to customers. Including packaging, warehousing etc
• Marketing and sales - informing customers abt the product, persuading to buy, ads, promo
• Service - installation of products, repairs, upgrades, advice
What are the support activities?
• Procurement - Acquisition of resource inputs for the primary activities. E.g. purchase of materials, equipment
• Human Resources - recruiting, training, development and rewards
• Infrastructure - Organisational structure and location of operations.
• Technology - product design, improving processes and resource utilisation
What are cost and value drivers ?
Cost driver - Reduces cost in organisation
Value driver - something customers value and influences buying decisions
What is cost leader strategy ? factors?
- components of the value chain deliver value through cost savings
Factors:
- economies of scale by investing in production facilities
- reduced cost of inputs and distribution of outputs
- relocation to countires with cheap COP
