Chapter 5 Flashcards
What is the resource based view?
That the competitive advantage and superior performance of an organisation are explained by the distinctiveness of its resources and capabilities
The resources and capabilities of an organisation contribute to its long term suvival and potentially, to competetive advantage
What are resources
The assets that organisations have! “What we have”
What are capabilities?
Are the ways that the organisations assets are deployed! “What we do”
What are threshold resources and capabilities?
Those resources and capabilities that are needed for an organisation to meet the necessary requirements to compete at all in a given market and achieve parity with competitors in the market.
The organisation cant survive without these over time
What are distinctive resources and capabilities?
These resources and capabilities are required to achive competetive advantage.
- These are dependent on an organisation having a distinctiveness or uniqueness that is of value to customers and that competitors find difficult to imitate
What does VRIO stand for?
V - Value
R - Rarity
I - Inimitability
O - Orgasational support
(V) When are resources and capabilities valuable? And what are the three components to consider?
When they create a product that is of value to customers and enables the organisation to respond to environmental opportunities or threats
Three components
- Value to customers
- Taking advantage of opportunities and neutralising threats
- Costs - Need to make a profit
(R) Rarity
What are rare resources and capabilities?
Are those possessed uniquely by one organisation or by a few others.
Valuable resources that are common among many organisations are unlikely to become a source of competietive advantage
(I) Inimitability
What is inimitable resources and capabilities?
Resouces and capabilities that competitors find difficult and costly to imitate or obtain or substitute –> competetive advantage
Give two reasons why resources and capabilities might be difficult to imitate. (Complex)
They involve interlinkages
Internal linkages - Linked activities and processes that delivier value to customers.
External interconectedness - Organisations make it difficult to for others to replicate because they develope activities togheter with customers and partners. Example, Apple –> partner with apps and music labels
What is casual ambiguity? What types are there?
It might be difficult to understand the causes and effects behind an organisations competetive advantage.
There are two types
Characteristic ambiguity - Where the significance of the characteristic itself is difficult to discern ir comprehend –> pehaps rooted in the organisations culture. Example, Know how of future fashion trends
Linkage ambiguity - When competitors cannot discern which activities and processes are dependent on which others to form linkages that create distictiveness
Mention how culture and history can make it difficult for competitors to replicate an organisation?
Resources and capabilities that involve social interactions can be difficult to replicate. Capabilities can become embedded in an organisations culture. Various activities are done in a specific manner “naturally” because employees and people know there part or is taken for granted that activities are done in a specific way.
What does orgasational support mean?
In order to achive competivitve advantage through resources and capabilities, the organisation have to be suitable organised to support these. This includes orgasational processes and systems. Competetive advantage can be lost or decreased if the organisation is not organised in a way to fully take advantage of valueble, rare and innimitable resources and capabilities.
What is a VRIO analysis
A VRIO analysis helps to evaluate if, how and to what extent an organisation or company has resources and capabilities that are 1. Valuable 2. Rare 3. Inimitable and 4. Supported by the organisation.
What is a Value chain
The value chain describes the catagories of activities within an organisation which, togheter, create a product or service.
What is a Value system
Most organisations are also part of a wider value system, the set of inter organisational links and relationships that are necessary to create a product or service.
What is dynamic capabilities?
An organisations ability to renew and recreate its resources and capabilities to meet the needs of changing environments
Three generic types of dynamic capabilities
1. Sensing - Scan and search for opportunities over different markets
2. Seizing - New products or services
3. Reconfiguration - To seize an opportunity may require new processes (capabilities)
Name two types of benchmarking?
Industry/Sector benchmarking - Compare performance against other organisations in the same industry
Best in class benchmarking - Comparing against the best in whichever industry
