Lecture 4 - Firm Resources and Competitiveness Flashcards
How is the firm seen through the Resource-Based view (RBV)?
And mention 2 tools it uses in its analysis
The firm is seen as a bundle of productive resources which form the basis to attain a competitive advantage in their markets and grow into new activities and markets.
1) The VRIO-framework
2) Application of concepts in a value chain analysis - on the decision whether to keep an activity in-house or outsource
Define Resources and mention the 2 types
= Refers to tangible and intangible assets a firm uses to implement its strategies
1) Primary resources
2) Capabilities
Define primary resources + the 2 kinds + examples of each
= The tangible and intangible assets + human resources that a firm uses to choose and implement its strategies
1) Tangible: observable and quantifiable
-Financial assets
-Physical assets
2) Intangible: also on balance sheet but harder to value
-Technological resources
-Reputational resources
-Human resources
Define capabilities and mention 5 processes of Cross-Funcional Capabilities
=Refer to firm-specific abilities to use resources to achieve organizational goals
1) Innovation
2) Operations
3) Marketing
4) Logistics and service
5) Corporate operations
Mention and define the 3 components of Strategic Renewal
1) Sensing:
The capacity to continuously scan the organizational environment to create a hypothesis about the likely evolution of technologies, costumer needs and marketplace responses.
-Involves scanning an monitoring internal and external technological developments
2) Seizing:
Developing and selecting business opportunities that fit with the organization’s environment and its strengths and weaknesses.
3) Transforming:
Enhancing, combining, protecting and reconfiguring the business’s intangible and tangible assets such that path dependencies and inertia are avoided.
Define Sustainable Competitive Advantage and mention the components of the VRIO framework
= Exists when a firm enjoys a long-lasting business advantage compared to rival firms
1) Value
2) Rarity
3) Imitability
4) Organizational aspects
*of resources and capabilities
Define Appropriability
The ability of a firm to appropriate value for itself.
*a part of the organizational aspects of VRIO
What is Benchmarking and which 2 questions does it concern itself with?
= Examining whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors
1) Which resources are most important in conferring sustainable competitive advantage in your industry?
2) Where are your strengths and weaknesses as compared to your competitors?
Mention the 4 steps of Benchmarking
1) Choose one or more benchmark organization to compare yourself with
2) Identify the relevant resources
-Value chain resources
-Cross-functional resources
3) Assess the importance of your resources.
-Here you can use the VRIO framework
4) Score and assess relative strengths
Define Outsourcing and Offshoring
Outsourcing = turning over an organizational activity to an outside supplier. A way to overcome a strategic weakness.
Offshoring = when activities are moved from the main country of operations to another country
Mention 2 aspects of building a resilient global value chain
1) Redundancy:
-To be able to source a product from an alternative supplier at a short notice
2) Organizational slack:
-Cushion of resources to be able to buy time and reply to external pressure
Implication for actions (resource-based view)
What 2 guidelines should managers follow?
1) Managers need to understand their resources, based on the VRIO framework to optimize their resource exploitation.
2) Managers need to continuously create new resources, partly by benchmarking and partly by developing entirely new capabilities that go beyond the state-of-the-art competitors.
