Internal Analysis Flashcards
What is strategic capability?
Strategic capability reflects the ability of an entity to use and exploit the resources available to it through competences developed in its activities and processes. It involves linking activities internally and externally and balancing core competences. The capability of the entity depends on its ability to exploit and sustain its sources of competitive advantage over time.
How does strategic capability contribute to competitive advantage?
Strategic capability contributes to competitive advantage by enabling an entity to exploit opportunities and address threats. It involves not just monitoring the environment but also effectively utilizing resources, developing competences, and maintaining a balance of core competences.
What is the resource-based view of the firm?
The resource-based view (RBV) of the firm suggests that strategic capability and competitive advantage are derived from the firm’s resources and how these resources are utilized through competences and capabilities.
What is the hierarchy of requirements for strategic capability?
The hierarchy of requirements for strategic capability involves: 1. Resources: The assets and inputs available to the firm. 2. Competences: The skills and abilities to use resources effectively. 3. Capabilities: The firm’s ability to coordinate and leverage competences. 4. Competitive Advantage: The unique position achieved by effectively utilizing resources and capabilities.
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What is the marketing approach?
The marketing approach defines markets by their customers and potential customers. Companies compete to sell goods and services to customers, with the most successful entities being those that meet customer needs effectively. Business success is achieved by providing goods or services in a way that meets customer needs better than competitors.
What is the marketing concept?
The marketing concept is that a business entity aims to deliver products or services to customers in a way that meets their needs better than competitors. Achieving and maintaining competitive advantage is central to this approach.
What are customer needs?
Customer needs refer to the reasons why customers choose certain products or services over others. Factors influencing these decisions include price, quality, design features, availability, convenience, and the influence of advertising or sales promotions.
What are the broad types of customers?
Customers can be broadly categorized into three types: 1. Consumers – individuals buying for personal use. 2. Industrial and commercial customers – other business entities. 3. Government organizations and agencies.
How do the needs of different types of customers vary?
Industrial and commercial customers are often more price-sensitive, while consumers may pay more for branded products or convenience due to advertising influence.
What are the 4 Ps of the marketing mix?
The 4 Ps of the marketing mix are: 1. Product – design features, quality, and additional services. 2. Price – the selling price and potential discounts. 3. Place – the channel of distribution, such as shops, supermarkets, direct delivery, or the internet. 4. Promotion – advertising, sales promotions, and direct selling methods.
What does ‘Product’ refer to in the 4 Ps?
‘Product’ refers to the design features, quality, and additional aspects such as delivery time, reliability, after-sales service, and warranties. For services, it includes technical and interpersonal skills of the service provider.
What does ‘Price’ refer to in the 4 Ps?
‘Price’ refers to the selling price of the product, including potential discounts or promotional pricing strategies.
What does ‘Place’ refer to in the 4 Ps?
‘Place’ refers to how the customer obtains the product or service, including distribution channels like shops, supermarkets, direct delivery, or online platforms.
What does ‘Promotion’ refer to in the 4 Ps?
‘Promotion’ includes the methods used to advertise and promote the product, such as advertising campaigns, direct selling, and sales promotions.
4.1 Definition of value
Customers are willing to pay money for goods or services due to the benefits they receive. The value created is the difference between the cost of production and the selling price. For example, buying leather for Rs. 1,000 and selling jackets for Rs. 10,000 creates value of Rs. 9,000.
4.1 Cost Leadership vs. Differentiation Strategy
A cost leadership strategy aims to create the same value as competitors but at a lower cost. A differentiation strategy aims to create more value than competitors by offering unique features or benefits.
4.2 Concept of the Value Chain
Porter’s value chain framework groups business activities into a series of value-adding steps. The total value added is the sum of value created at each stage along the chain.
4.3 Primary Value Chain Activities
Porter identified the following primary value chain activities: Inbound Logistics (handling purchased materials), Operations (converting materials into products), Outbound Logistics (distributing finished goods), Marketing and Sales (promoting and selling products), and Service (post-sale support).
4.4 Secondary Value Chain Activities
Secondary activities, or support activities, include: Procurement (buying resources), Technology Development (product design and IT systems), Human Resources Management (recruiting and training), and Corporate Infrastructure (management systems and quality control).
