Chapter 5 - Strategic capability Flashcards
Define strategic capability
The adequacy and suitability of its resources and competences
Define threshold competences
Activities and processes needed to meet minimum customer requirements
Define threshold resources
Resources needed to meet minimum customer requirements
Define core competences
Activities and processes through which competitive advantages are achieved
Define unique resources
Resources that underpin competitive advantage and that others cannot easily imitate.
Define competitive advantage
Ability to generate greater returns than those of competitors over long term
What are the four qualities that resources and competences must have for competitive advantage to be achieved?
VIRO
- Value - placed by customer
- Inimitability - competitors cannot imitate
- Rarity - competitors less likely to have access
- Organisational support - support the capabilities through resources
Define dynamic capabilities
The ability to develop and change competences in response to changing environments.
Define knowledge management
Exploiting existing knowledge to create new knowledge so that it may be exploited in turn.
What is Porter’s value chain?
A framework for assessing the strategic capabilities of an organisation and how its activities add value.
The margin is the excess the customer is prepared to pay over cost to firm.
What are the primary activities of Porter’s value chain?
- Inbound logisticsv - receiving, handling, storing inputs
- Operations - converting resource into final product
- Outbound logistics - storing and distributing to customer (packaging, testing)
- Marketing and sales - informing customer
- After sales service
What are the support activities of Porter’s value chain?
- Firm infrastructure - planning, quality control, structures
- Technological development - product design, improve process
- Human resources management - recruiting, training, rewarding
- Procurement - acquiring resource inputs
What is a value network?
Linkages with the value chains of suppliers and customers - inter-organisational links
What does SWOT analysis do?
Summarises the key issues from the business environment that are most likely to impact strategy
