Chp 7: Resources and capabilities

Question 1

What are the ‘9 Ms’ used to undertake a resources audit?

Answer 1

1. Manpower
2. Money
3. Machinery
4. Materials
5. Markets
6. Management
7. Methods - processes
8. Make up - organisational structure and culture
9. Management information systems

Question 2

For competitive advantage to be achieved, Johnson et al suggests advantages/competences must have what four qualities?

Answer 2

1. Value
2. Rarity - only gives advantage if competitors don’t have access to it
3. Inimitability - competitors have difficulty replicating it
4. Organisatinal support - can the organisation supports it’s capabilities?

Question 3

Teece highlighted three elements of dynamic capabilites that firms need?

Answer 3

1. Sensing - organisations must constantly search for opportunities
2. Seizing - develop new business models to exploit opportunities
3. Transforming - reconfigure it’s culture, structure and capabilites as necessary to achieve those business plans

Question 4

What are the three main types of value driver?

Answer 4

1. Growth drivers - value creating opportunities
2. Efficiency drivers - operating efficiency
3. Financial drivers - reduce capital cost

Question 5

Rappaport identified seven value drivers, what are they?

Answer 5

1. Increase sales growth rate
2. Increase operating profit margin
3. Reduce tax rate
4. Reduce incremental investment in capital expenditure
5. Increase duration of competitve advantage - period of value growth
6. Reduce investment in working capital
7. Reduce cost of capital

Question 6

What four things make up Porters support activites?

Answer 6

1. Firm infrastructure
2. Human Resource Management
3. Technology Development
4. Procurement

Question 7

What five things make up Porters primary activities?

Answer 7

1. Inbound logistics
2. Operations
3. Outbound logistics
4. Marketing and sales
5. After sales service

Question 8

What are the five alternative primary activites that service organisations use in Porters Value Chain?

Answer 8

1. Problem-finding and acquisition - recording, reviewing and formulating the problem to be solved (may require marketing)
2. Problem solving - using professional expertise to evaluate the problem
3. Choice between solutions - a preferred solution is chosen
4. Solution implementation - implement and communicate to client
5. Control and feedback - measure the extent to which the problem is solved

Question 9

What are the four main strategies that can be pursued in respect to business unites or products?

Answer 9

1. Build - forgoe short term profit for icnreased market share
2. Hold - defend market position
3. Harvest - seek short term earnings at the expense of long term development
4. Divest - disposal of a poorly performing product/BU

Question 10

What is the definition of relativ emarket share and the benchmark for high or low market growth?

BCG Matrix

Answer 10

• Relative market share is your own market share divided by the market share of the largest rival (score of >1 indicates the market leader)
• Market growth of over 10% is considered high, below that is low

Question 11

What are the seven steps in setting a benchmarking programme?

Answer 11

1. Set objectives and areas to benchmark
2. Establish key performance measures
3. Select organisations to benchmark against
4. Measure own and others performance
5. Compare results and identify gaps
6. Design and implement and improvement programme
7. Monitor improvements in performance