Frameworks definitions

Question 1

Layers of the business environment

Answer 1

Macro
Industry (or sector)
Competitors (or market)
Organisation

Question 2

Porter’s Value Chain

Answer 2

a sequence of activities through which the organisation’s inputs are transformed into valuable outputs

Question 3

What does Porter’s Value Chain do?

Answer 3

Maps out an organisation’s process & identifies opportunities to increase value.
Wants to split final value into multiple activities so these can be properly distributed based on competitive advantage

Question 4

How do you utilise Porter’s value chain?

Answer 4

1. Identify key success factor of the business

2. Use Value Chain to identify Resources and Capabilities

Question 5

Porter’s value chain primary activities vs support acitivities

Answer 5

directly add value to final product

Support activities indirectly add value to final product

Question 6

Critique of value chain

Answer 6

1. Hard to measure generated value from each component
2. View organisations as just linear
3. Better for manufacturing
4. Created when being big was a key aspect to CA
5. Less applicable to smaller businesses
6. No distinction btw generic & distinct goods

Question 7

Difference between value chain analysis and RBV

Answer 7

Value chain focuses on evaluating distribution & logistics, whilst RBV more grounded in economics

Question 8

Value chain depicts all of the key

Answer 8

profit-building activities a company engages in.

1. Inbound logistics
2. Operations
3. Outbound logistics
4. Marketing
5. Sales
6. Service.

By analysing each step of value you create, you can figure out how to reduce your business’ costs or improve your ability to generate more revenue through marketing and sales.

Question 9

Value Chain: By analysing each step of value you create, you can figure out how to

Answer 9

By analysing each step of value you create, you can figure out how to reduce your business’ costs or improve your ability to generate more revenue through marketing and sales.

Question 10

RBV

Answer 10

certain assets with certain characteristics will lead to sustainable competitive advantage. All the traits are required to be present to result in a sustainable competitive advantage

Question 11

Why is RBV good?

Answer 11

Every organisation is different which is why RBV is very powerful way of understanding organisations.

Question 12

RBV outline

Answer 12

RBV relies on tangible & intangible resources that must be heterogenous or immobile and have VRIN attributes to become VRIN resources that provide CA

Question 13

The RBV highlights that resources & capabilities are the interface

Answer 13

between strategy & the firm. Must implement a strategy based on the firm’s strengths

Question 14

Profitiability under RBV is seen as key

Answer 14

to exploit one’s differences

Question 15

Types of resources

Answer 15

1. Tangible
2. Intangible
3. Human

Question 16

RBV: Resources and capabilities lead to a CA when they are

Answer 16

Valuable
Rare
Imperfectly Imitable
Non-substitutable

Question 17

SWOT internal

Answer 17

Strengths
Weaknesses
Opportunities
Threats
(attributes of the organisation)

Question 18

SWOT external

Answer 18

(attributes of the environment) opportunities and threats

Question 19

SWOT analysis points to

Answer 19

the importance of both external & internal factors in the understanding of sources & CA

Question 20

Limitations of SWOT

Answer 20

1. Strengths may not lead to an advantage
2. Doesn’t prioritise issues or offer alternative solutions
3. focus on the external environment is too narrow
4. gives a one-shot view of a moving target
5. overemphasizes a single dimension of strategy
6. Potential for human error, people aren’t prevalent

Question 21

Limitations of VRIN and RBV

Answer 21

Doesn’t provide a strategy

Question 22

What must we note about all analyses?

Answer 22

No analysis is perfect. The most effective outcome can be achieved when used in conjunction with other frameworks.

Question 23

LAN resources

Answer 23

Staff, aircraft, low cost model, expansive routes (oneworld alliance), combined cargo & passenger model, subsidiaries, strong leadership, reputation, brand image, longstanding history

Question 24

RBC criticisms

Answer 24

1. Fails to address and acknowledge that these resources do not exist and in isolation
2. Fails to address the creation and development of resources
3. Difficult to assignment what are resources
4. Many times resource is also caught across multiple organisations
5. Who owns?
   o E.g. network, relationships
6. Documented?
7. Simplified view of complex aspects of business
8. Resources go through evolutions
9. Silent to explain evolution
10. Hold onto it! Important ability

Question 25

Although a firm’s resources and capabilities may have added value in the past, changes in

Answer 25

customer tastes, industry structure, or technology can render them less valuable in the future

Question 26

More commonly, changes in a firm’s environment may reduce the value of a firm’s resources in their current use, while

Answer 26

leaving the value of those resources in other uses unchanged. Such changes might even increase the value of those resources in those other uses.

Question 27

Question of Value

Answer 27

Do a firm’s resources and capabilities add value by enabling it to exploit opportunities/neutralise them?