Lecture 9/10 - Strategy & Resources Flashcards
What are the 2 roles that resources play for organizations?
Fuel - they are the assets REQUIRED for the business to function
Certain resources can also be sources of competitive advantage!
What is meant by the statement “Resources both constrain and drive strategy”?
CONSTRAIN: Inadequate resources may prevent you from implementing strategic proposals that make sense based on the opportunities and challenges in the environment.
DRIVE: Powerful resources may drive strategy if they represent a potential for sustained competitive advantage.
What are the 3 types of resources. Give examples for each.
Tangibles
- Marketing (ads)
- Financial (capital)
- Human resources
- Physical locations
- Operations (factory)
Intangible
- Brand
- Reputation
Organization Capabilities
- Routines
- Processes
- Abilities
What are strategic resources?
Non-tradable assets which develop and accumulate WITHIN the firm, and which are valuable in the industry. Such assets defy imitation because they have a strong tacit dimension and are socially complex.
How does the “Competing on Resources” article describe the source of an organization’s competitive advantage?
Competitive advantage can ultimately be attributed to the ownership of a valuable resource that enables the company to perform activities better or more cheaply than competitors.
***What are the 3 key tasks of a manager related to resources?
- Finding/investing in resources
- Upgrading resources
- Leveraging resources
What is a resource-based strategy?
Resource-based strategies attempt to exploit company resources to offer value to customers in ways rivals cannot match.
***What are 4 reasons with the resource-based view (RBV) is useful?
- Gain an internal perspective of the firm.
- Way of explaining why some competitors are more profitable than others.
- Suggests how to put an idea of core competencies into practice.
- Helps develop strategies that make sense depending on what you already have/can get.
**To be the basis for sustainable competitive advantage, the Barney strategic resources test suggests that the resource must be… (4)
VRIO
- Valuable
- Rare
- Inimitable (Difficult to imitate)
- The company must be ORGANIZED to take advantage of it.
Note: Having only 1 and 2 will result in a SHORT-TERM competitive advantage (eventually, others will just copy it)
According to the “Competing on Resources” article, when are resources strategically valuable? (5)
- It is hard to copy
- It depreciates slowly (can sustain a competitive advantage over time)
- Your company (not employees, suppliers, or customers) controls its value
- It cannot be easily substituted
- It is better than competitors’ similar resources
What makes a resource hard to copy? (6)
- Physical uniqueness (e.g., great locations)
- History (created as a result of unique historical circumstances)
- Path dependency
- Casual ambiguity (unclear what is actually creating that advantage)
- Social complexity (e.g., hard to imitate culture of teamwork)
- Economic deterrence (e.g., a sizeable investment in an asset).
What are the 5 steps of Resource Analysis?
- Develop/analyze the strategy
- Identify resource/capability requirements for the proposed strategy
- Test the strategy-resources link (what do we have vs. what do we need?)
- Develop gap-closing analysis (what do we need to get? how hard will that be? what is the timeline?)
- Move to next step of Diamond-E analysis
What is the recommended method for completing steps 2 and 3 of resource analysis (identifying requirements and gaps)?
Internal Value Chain Analysis!
–> What is the firm doing differently?
How do we conduct an internal value chain analysis? (5 steps)
- Determine corporate resources
- Identify functional areas of the company (core activities)
- Link resources to the functional areas
- Identify competitive resources/capabilities
- Compare any identified competitive resources/capabilities to overall strategy
