Chapter 4: Competitiveness and Growth

Question 1

Resourced-base view

Answer 1

• The resource-based view has emerged as one of the two core perspectives on global
business.
– It focuses on the inside of the firm, complementing the institutional view, which focuses on
firms’ external environment.
• Which resources add value to a firm?
• How can you systematically assess resources?
• How can firms manage their resources to create value?
– Classification schemes for resources.
– Focus on value (V), rarity (R), imitability (I) and organization (O) through a VRIO
framework.

Question 2

identifying resources (primary resources/ capabilities)

Answer 2

• Primary resources
– Provide the basis for a firm to attain competitive advantage (i.e., the ability to outperform its
rivals).
– Are the tangible and intangible assets as well as the human resources that a firm uses to
choose and implement its strategies.

• Capabilities
– Firm specific abilities to use resources to achieve organizational objectives.
– Are normally developed internally and depend on tacit knowledge.

Question 3

Tangible (materielle) assets (primary resources)

Answer 3

• Tangible assets are those items that are observable and quantifiable.
– Financial assets include internal funds such as shareholders’ capital and retained profits,
as well as external capital, like loans provided by banks.
– Physical assets include plants, offices, infrastructure and equipment, as well as inventories
of raw materials, components and finished goods.

Question 4

Intangible (immaterielle) assets ( primary resources)

Answer 4

• Intangible assets are also found on companies’ balance sheets, but they are harder to value.
– Technological resources include patents, trademarks and copyrights that entitle the firm to
intellectual property rights and enable it to generate valuable products.
– Reputational resources are the firm’s goodwill, brand names and business relationships.
• Goodwill is the value of abilities to develop and leverage the firm’s reputation as a
solid provider of goods and services, an attractive employer and/or a socially
responsible corporate citizen.
• Reputation can be regarded as an outcome of a competitive process in which firms
signal their attributes

Question 5

Human Resources

Answer 5

• Human resources (or human capital) are embedded in the individuals working in an
organization.
– individual employees’ skills, talent and knowledge,
– individual employees’ capacity for collaboration and communication, and their abilities for
interpersonal interaction that are not captured by the firms’ formal systems and structures.
– employees’ shared values, traditions and social norms within an organization (i.e.
organizational culture)
• Financial analysts may take human resources for granted.
• Many MNEs regard them as a foundation of their capabilities.

Question 6

How Can We Make An Inventory Of Capabilities?

Answer 6

• Capabilities in innovation:
– Firm’s assets and skills to (1) research and develop new products and services and (2)
innovate and change ways of organizing.

• Capabilities in operations
– A firm’s ability to effectively implement its regular activities, notably the manufacturing
process.

• Capabilities in marketing
– Enable firms to develop and sustain brands awareness and values and to induce
consumers to buy these brands.

• Capabilities in sales and distribution
– Enable firms to manage interactions with (potential) customers and in bringing products to
the right customer at the right time.

• Capabilities in corporate functions
– Include a firm’s planning, command, and control systems and
structures

Question 7

Vendor managed inventory (yupply chain Walmart)

Answer 7

Vom Lieferanten verwalteter Lagerbestand

Question 8

Strategic partnerships & Cross docking & State f the Art Capabilities (Supply Chain Wamart)

Answer 8

Strategic Partnerships: with most of their vendors, offering them the potential for long-term and
high-volume purchases in exchange for the lowest possible prices.

Cross Docking:
the direct transfer of products from inbound or outbound truck trailers without
the need for extra storage, by unloading items from an incoming semi-trailer truck or railroad car
and loading these materials directly into outbound trucks, trailers, or rail cars (and vice versa),
with no storage in between
– Goods will cross from one loading dock to another, usually in 24 hours or less

• State of the art Technology
– Allows Walmart to accurately forecast demand
– Track and predict inventory levels
– Create highly efficient transportation routes
– Manage customer relationships

Question 9

The VRIO (Ressource based View)

Answer 9

Resource-based view focusing on the value (V), rarity (R), imitability (I), and organizational (O)
aspects of resources and capabilities.
• Valuable
– Do the resources add value? Do they enable a firm to exploit an external opportunity or
neutralize an external threat?
• Rarity
– How rare are the resources?
– Can lead to a temporary competitive advantage
• Imitability
– How difficult is it for competitors to imitate the resources=
– Problem of causal ambiguity: difficulty of identifying the causal determinants of successful
firm performance
• Organization
– Sustainable Competitive advantage: Ability to deliver persistently above average
performance

Question 10

Benchmarking (Resource analysis)

Answer 10

• Benchmarking compares resources against those of your competitors on two questions:
– Which resources are most important in conferring sustainable competitive advantage in
your industry?
– Where are your strengths and weaknesses as compared to your competitors?
• Benchmarking has 4 Steps:
1. Choose a benchmark organization to compare yourself with.
2. Identify the relevant resources.
3. Assess the importance of your resources. (VRIO)
4. Score and assess the relative strengths.