Chapter 3 Flashcards
resource-based view
A leading perspective of strategy that suggests that differences in firm performance are most fundamentally driven by differences in firm resources and capabilities
resource & capability
The tangible and intangible assets a firm uses to choose and implement its strategies
dynamic capability
A firm’s capacity to build and protect competitive advantage, including the ability to sense and seize opportunities and reconfigure existing assets
tangible resources and capabilities
Observable and quantifiable resources and capabilities that are physical
intangible resources and capabilities
Hard-to-observe and difficult-to-codify resources and capabilities
design thinking
An iterative process in which firms seek to
- understand users
- challenge assumptions
- solve problems in a creative way
sensing
Abilities to discover opportunities
seizing
Abilities to capture value from opportunities
reconfiguration
Abilities to remain flexible by redesigning
- business models
- realigning assets
- revamping routines
value chain
Goods and services produced through a chain of vertical activities that add value
benchmarking
Examination as to whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors
commoditization
A process of market competition through which unique products that command high prices and high margins generally lose their ability to do so—these products thus become “commodities”
outsourcing
Turning over all or part of an activity to an outside supplier to improve the performance of the focal firm
offshoring
International/foreign outsourcing
onshoring
Outsourcing to a domestic firm
captive sourcing
- Setting up subsidiaries to perform in-house work in foreign locations
- Conceptually identical to foreign direct investment (FDI)
VRIO framework
A resource-based framework that focuses on the aspects of resources and capabilities which include
- value (V)
- rarity (R)
- imitability (I)
- organizational (O)
causal ambiguity
The difficulty of identifying the causal determinants of successful firm performance
complementary asset
Noncore assets that complement and support the value-adding activities of core assets
ambidexterity
Ability to use one’s both hands equally well. In management jargon, this term has been used to describe capabilities to simultaneously deal with paradoxes (such as exploration versus exploitation)
social complexity
The socially complex ways of organizing (typical of many firms)
strategic sweet spot
the overlap of customer needs and the company’s capabilities
hypercompetition
A way of competition centered on dynamic maneuvering intended to unleash a series of small, unpredictable, but powerful actions to erode the rival’s competitive advantage
business process outsourcing (BPO)
Outsourcing of business processes such as
- loan origination
- credit card processing
- call center operations
original equipment manufacturer (OEM)
A firm that executes design blueprints provided by other firms and manufactures such products
original design manufacturer (ODM)
A firm that both designs and manufactures products
original brand manufacturer (OBM)
A firm that designs, manufactures, and markets branded products
reshoring
Moving formerly offshored activities back to the home country of the focal firm
The title of Chapter 3
Leveraging Resources and Capabilities
