Chapter 4 Flashcards
Resource-based view
Certain resources and capabilities specific to one company that are not shared by competitors.
SWOT Analysis
A tool for determining a firm’s strengths (S), weaknesses (W), opportunities (O), and threats (T).
Resources/Capabilities
The tangible and intangible assets a firm uses to choose and implement its strategies
Tangible resources/capabilities
Assets that are observable and easily quantified
Financial, Physical, Technological, Organizational
Intangible resources/capabilities
Assets that are hard to observe and difficult (if not impossible) to quantify.
Human, Innovation, Reputational
Value Chain
Series of activities used in the production of goods and services that make a product or service more valuable
Benchmarking
Examining whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors
Commoditization
Process of market competition through which unique products that command high prices and high margins gradually lose their ability to do so, thus becoming commodities
Do not outsource when
- Cheaper in-house
- Requires specialized assets which few suppliers can provide
- Core product or core part
Outsourcing
Turning over an organizational activity to an outside supplier that will perform it on behalf of the focal firm
Offshoring
Outsourcing to an international or foreign firm
In/Onshoring
Outsourcing to a domestic firm
Captive sourcing
Setting up subsidiaries abroad so that the work done is in-house but the location is foreign. Also known as foreign direct investment (FDI).
Resource-based view
focusing on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities
Value
Adding resources lead to competitive advantage
Rarity
Valuable and rare resources provide competitive advantage
Valuable and common resources at best lead to competitive parity
Imitability
Valuable and rare resources offer competitive advantage when they are hard for competitors to imitate
Casual ambiguity
Difficulty of identifying the actual cause of a firm’s successful performance
Organization
Firms must be properly organized to take full advantage of the resources and capabilities they possess
Complementary assets
Combination of numerous resources and assets that enable a firm to gain a competitive advantage
Example: expertise and talent involved in making a film production
Social complexity
Socially intricate and interdependent ways firms are typically organized
Opposite: LEGO view - employees are identical and replaceable
Original equipment manufacturer (OEM)
Firm that executes design blueprints provided by Western firms
Original design manufacturer (ODM)
Firm that executes manufacturing based on their own design blueprints
Original brand manufacturer (OBM)
Firm that executes manufacturing based on their own design blueprints and sells the product under their own name
