Ch. 3 Flashcards
value chain analysis
views the organization as a sequential process of value-creating activities
primary activities
inbound logistics, operations, outbound logistics, marketing and sales, and service - contribute to the physical creation of the product or service, its sale and transfer to the buyer and its service after the sale
support activities
procurement, technology development, HR Management, and general administration - either add value by themselves or add value through important relationships with both primary activities and other support activities
inbound logistics
primarily associated with receiving, storing, and distributing inputs to the product
- material handing, warehousing, inventory control, vehicle scheduling
operations
include all actives associated with transforming inputs into the final product form, such as machining, packaging, assembly, testing, printing, and facility operations
outbound logistics
associated with collecting, storing, and distributing the product or service to buyers
- warehousing, material handling, delivery vehicle operation, order processing and scheduling
marketing and sales
activities are associated with purchases of products and services by end users and the inducements used to get them to make purchases
- advertising, sales force, quoting, channel selection, pricing
service
primary activity includes all actions associated with providing service to enhance or maintain the value of the product, such as installation, repair, training, parts supply, and product adjustment
procurement
refers to the function of purchasing inputs used in the firms value chain, not to the purchased inputs themselves
purchased inputs - raw materials, supplies, and other items such as machinery, laboratory equipment, office equipment, and buildings
technology development
related to the product and its features supports the entire value chain, while other technology development is associated with particular primary or support activities
human resource management
recruiting, hiring, training, development, and compensation
supports both individual primary and support activities and the entire value chain
general administration
consists of a number of actives, including general management, planing, finance, accounting
- typically supports the entire value chain and not individual activities
resource based view of the firm
combines two perspectives
1- internal analysis of phenomena within a company
2- external analysis of the industry and its competitive environment
aka SWOT
tangible resources
assets that are relatively easy to identify
accounts receivable , equipment, patents, copyrights, strategic plan
intangible resources
unique routines and practices
experience, ideas, brand name, product quality
organizational capabilities
not specific tangible or intangible assets, but rather the competing or skills that. a firm employs to transform inputs into outputs
Four attributes for a resource to be a competitive advantage
1- valuable
2- rare
3-difficult to imitate (3 things - physical uniqueness, path dependency, and casual ambiguity)
4-difficult to substitute
path dependency
a greater number of resources cannot be imitated
aka scarce
casual ambiguity
costly to imitate or competitor wouldn’t know how
social complexity
costly to imitate because of social engineering
resources and capabilities must be….
rare and valuable as well as difficult to imitate or substitute in order for a firm to attain competitive advantages that are sustainable over time.
Four factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate:
- employee bargaining power: employees are vital to firms unique capability = high wages
- employee replacement cost: employee skills are rare = high bargaining power on high cost to replace them
- employee exit costs: high personal costs when leaving the organization
- manager bargaining power: how well they create resource-based advantages
evaluating firms performance: financial ratio analysis
how a firm is performing according to its balance sheet, income statement, and market valuation
-short term/long term solvency/liquidity, asset management , profitability, market value
evaluating firms performance: stakeholder view
firms must satisfy a brand range of stakeholders, including employees, customers’ and owners, to ensure their long term viability
balanced scorecard
comprehensive view of business
four key perspectives: customer, internal, innovation, and learning and financial
