L2- External A. & Resource Integration Flashcards
two attributes of tangible resources
visible
quantified
define capability
Capabilities are a company’s ability to perform a specific set of tasks using its resources.
how is value measured?
products performance characteristics and attributes for which customers are willing to pay
define core competencies
core competencies are resources and capabilities that serve as a source of competitive advantage
define competitive advantage
competitive advantage is when a firm implements a strategy that competitors are unable/ find too costly to duplicate.
does the resource based view of the firm assume resources are mobile or immobile?
IMPERFECTLY MOBILE
define valuable within VRIN
does it allow the firm to exploit its opportunities or neutralize threats form the external environment
define inimitable within VRIN
is the resource costly/ hard to imitate due to historical conditions, social complexity, and causal ambiguity (about features e.g coffee capsules)
nonsubstitutable within VRIN
there are no strategic equivalent resources or capabilities.
similarities btw vrin and value chain anlaysis
- internal analysis
- explores sources of competitive advantage
how does value chain analysis explore sources of comp. adv?
by examining how each activity in the value chain contributes to the firm’s cost structure or differentiation.
define value chain analysis
a tool for internal analysis that dissects a company’s operations into primary and support activities.
the goal of value chain analysis
identify strengths, weaknesses, and opportunities for improvement within the firm’s value creation process.
types of primary activities (5)
- inbound logistics
- outbound logistics
- operation
- marketing and sales
- service
types of support activities (4)
- firm infrastructure
- HR management
- tech dev.
- procurement
define procurement
sourcing and acquiring the resources needed for primary activities.
what does firm infrastructure (under support) include?
management, planning, finance, and other support functions.
inbound logistics (primary)
receiving, storing, and distributing inputs for production.
define operation (under primary)
production and assembly of product
outbound logistics (primary)
getting the finished product to customers
A resource/ capability is a source of competitive advantage when it allows the firm to:
(2)
- Perform an activity in a way that provides value superior to that provided by competitors
- Perform a value-creating activity that competitors can’t/ find too costly to perform.
according to the value chain analysis, if a firm cannot achieve competitive adv. they should
outsource, and integrate different parts of the value chain.
how is VRIN used in SWOT
Using VRIN to analyze weaknesses and strengths.
how is PESTEL & Porter’s 5 used in SWOT
Using PESTLE or Porter’s 5 forces to analyze opportunities, and threats.
Threats + strengths ->
threat y being buffered by strength c
define stable integration
companies acquire external resources, like research firms or technologies, to enhance their products while maintaining their existing internal structure and processes
where is stable integration seen and why?
biotechnology and pharmaceuticals
Companies in these sectors acquire external resources, such as research firms or technologies, to improve their offerings while keeping these resources unchanged. This means they can ensure stability in their operations.
what’s the approach of stable integration?
select and integrate external resources without disrupting or altering the core internal processes and structures of the company.
define modular integration
the strategic selection of external resources that complement a company’s strengths, OR including the substitution of specific elements in the value chain.
where is modular integration seen and why?
Apple outsources manufacturing while concentrating on design and marketing
In such companies, different components are assembled externally to leverage specialized capabilities.
approach of modular integration
purposefully selecting external resources to enhance specific aspects of the value chain while maintaining control over other critical elements. !!!!
define dynamic integration
an ongoing process emphasizing continuous knowledge exchange between a company’s internal teams and external partners.
where is dynamic integration seen and why?
technology sectors
For example, when internal software developers actively engage in open-source software projects, this dynamic approach keeps their software current and allows them to benefit from the latest industry developments.
approach of dynamic integration
actively engaging in continuous knowledge sharing and adapting internal processes based on the evolving information and insights
summarize all 3 major approaches to integration
stable integration maintains stability by integrating external resources without significant changes
modular integration strategically selects and substitutes elements in the value chain for efficiency
dynamic integration involves ongoing knowledge exchange for continuous adaptation.
3 main characteristics of closed innovation paradigm
- Conducts research and development internally within the organization.
- Emphasis is on serving the existing market, with limited exploration beyond current market demands.
- Limited engagement with external partners or competitors.
3 main characteristics of open innovation paradigm
- Actively collaborates with external partners, leveraging their expertise.
- Seeks innovation opportunities beyond current market demands.
- Utilizes licensing agreements, technology spinoffs, and technology insourcing to integrate external knowledge and technologies into internal processes
define liscensing
seeking external technologies through formal agreements, enabling the organization to incorporate them into its operations.
define tech. spinoffs
encourage the creation of new innovative concepts outside the organization, fostering the development of novel ideas and technologies beyond internal boundaries.
define tech. insourcing
the incorporation of external expertise as a crucial aspect of the innovation strategy, bringing external knowledge and skills into the organization’s internal processes.
why can a competency be costly to imitate?
- historical (unique org. culture or brand name)
- ambiguous cause (the causes, and uses of competence is unclear)
- social complexity (interpersonal r.ships, trust among managers, suppliers, and customers)
difference between procurement and inbound logistics
procurement is about acquiring goods
inbound logistics is about managing the physical flow of these goods into a company.
Conditions affecting managerial decisions about resources, capabilities, and core competencies:
- Uncertainty
- Complexity
- Intra-organizational Conflicts
main argument of barney (1991)
in industries characterized by perfect homogeneity and high resource mobility, firms cannot expect to achieve sustained competitive advantages.
First-mover advantages are conditional on (…)
resource heterogeneity
