Chapter 4 strategic capability

Question 1

definition of strategic capability

Answer 1

the ability of an entity to use and exploit the resources available to it through the competencies, processes and activities that the entity has built, the ways in which these activities are linked internally and externally and the overall balance of its core competencies.

Question 2

what are the questions for making strategic assessment of performance?

Answer 2

 How is value added by this part of the value chain?
 Has the entity been successful in adding value in this part of the value chain?

 Has the entity been more successful than its competitors in adding value in this part of the value chain?

 Has there been a failure to add value successfully?

 Does the entity have the core competencies in this part of the value chain to add value successfully? (If not, a decision might be taken to out-source the activities.)

Question 3

enlist the techniques for assessing resources and competences

Answer 3

value chain analysis
capability profile
swot analysis
resource audit

Question 4

outline of value chain analysis

Answer 4

value chain refers to the interconnected activities that create value
Activities within an organization can be analyzed into different catagories, Total value added by entity is sum of value created by each stage along the chain

value chain can be divided into two components
1. Primary activities
2. Support activities

Question 5

explain the primary activities in value chain analysis

Answer 5

1. Inbound logistics (receiving and storing)
2. operations (Inputs converted into output)
3. Outbound logistics (getting goods and services to buyers)
4. Marketing and sales (informing buyers and consumers about products or services)
5. Service (maintaining product performance after product has been sold)

Question 6

explain the support activities in value chain analysis.

Answer 6

1)Procurement-How resources are acquired (e.g. negotiating with suppliers)
2) HRM - Recruiting, developing, motivating and rewarding the workforce.

3) Technology Development

4)Infrastructure- Support systems and functions (e.g. finance, quality control etc)