Lecture 5 - Internal context of strategy Flashcards
What does CORE stand for?
Context
Overview
Ratios
Evaluation
Context
Who are comparable organisations to benchmark against
Overview
How do companies compare on size, profit, turnover, share price, etc
Ratios
How do they compare on ROI, profit margin, price earnings etc.
Evaluation
The important conclusions
Financial analysis
Reports historical results
Measures one set of “symptoms”
Strategic Analysis
Focuses on the future
Looks at underlying causes
What are resources?
“ Inputs to an organisation’s production or operating processes”
What are the 2 main types of resources?
Tangible & intangible
Tangible resources (3):
Financial e.g. borrowing capacity, cash reserves
Physical e.g. location, equipment, access to raw materials
Human e.g. employee skills, adaptability, loyalty
Intangible resources (3):
Intellectual e.g. patents, copyrights, trade secrets, R&D
Reputation e.g. brands, trademarks
Relationships e.g. with customers, government, suppliers
Intangible resources tend to be more important than tangible resources today
“In a knowledge-based economy, intellectual capital is likely to be a major asset of any organisation.”
Johnson, Scholes and Whittington 2005
Characteristics of resources (3)
Can be traded
Ownership generally easy to specify
- relatively easy to copy or acquire
Degrades with use or time
- need to be maintained, even for the intangible resources…
Core capabilities definition
“cluster of attributes that an organization possesses which in turn allow it to achieve competitive advantage”
(Henry, 2008, p129)
(Henry, 2008, p129)
“cluster of attributes that an organization possesses which in turn allow it to achieve competitive advantage” (CORE CAPABILITIES)
