Lecture 4 - Resources and Capabilities

Question 1

Define an organisational resource.

Answer 1

Assets an organisation can call upon (e.g. coffee machines, baristas)

Question 2

Define a capability.

Answer 2

The way the organisation’s assets are deployed or used (e.g. making coffee from coffee beans)

Question 3

What are threshold capabilities?

Answer 3

Capabilities that are needed for an organisation to be able to compete in a market, also known as ‘qualifiers’

Question 4

What are distinctive capabilities? These are ???? to ???? and ???? to ????.

Answer 4

Capabilities that are required to achieve a competitive advantage. These are valuable to customers and difficult to imitate.

Question 5

What are the two approaches to identifying resources and capabilities?

Answer 5

Start from the inside (value chain)
Start from the outside (Key Success Factors)

Question 6

Explain the KSF approach to identifying resources and capabilities.

Answer 6

If one looks at what customers value the most in their products, and then at what the company is producing then they can identify key resources and capabilities. One can also use this information to understand what customers value and focus on that aggressively.

Question 7

What is the VRIO framework. Explain each of the factors.

Answer 7

Valuable - creates value for the customer
Rare - not many out there
Inimitable - Hard to copy
Organisationally embedded - Need to leverage these advantages to extract the value from the resources

Question 8

What is the VRIO framework useful for?

Answer 8

Appraising resources and capabilities.

Question 9

Define dynamic capabilities.

Answer 9

When a company is able to change its core activities in response to industry change.

Question 10

What are sensing capabilities?

Answer 10

Constantly scanning and exploring new opportunities across markets and technologies.

Question 11

What are seizing capabilities?

Answer 11

Addressing opportunities through new products, processes and activities.

Question 12

What is re-configuring capabilities?

Answer 12

New products and processes may require renewal and reconfiguration of capabilities and investment in new technologies.

Question 13

What are 2 types of resource and what are their 2 subtypes each?

Answer 13

Tangible and intangible resources.
Tangible:
* Financial
* Physical
Intangible:
* Technology
* Reputation

Question 14

To make coffee (not talking about beans) in the coffee shop industry is what type of capability?

Answer 14

Qualifier or threshold

Question 15

To make place-themed cocktails with unique homemade ingredients in the cocktail bar industry is what type of capability?

Answer 15

Distinctive capability (winner)

Question 16

What are support activities in the value chain?

Answer 16

Outside of the primary activities, required but not in the direct chain of events to create value, spread across all the value chain
* Firm infrastructure
* Human Resource Management
* Technology Development
* Procurement

Question 17

(Not VRIO) What are the steps to the framework to analyse resources and capabilities?

Answer 17

1. Identify resources and capabilities
2. Appraise them in terms of strategic importance and relative strength
3. Develop strategy implications:
   * How do you develop strengths?
   * Can weaknesses be offset by investment?
   * Can they be outsourced?
   * Which segments do they impact the least?

Question 18

What are ordinary capabilities?

Answer 18

Capabilities that might be necessary to operate efficiently now but may not be so to sustain superior performance in the future

Question 19

What are 3 examples of dynamic capabilities?

Answer 19

Sensing
Seizing
Re-configuring
…capabilities