Mgt 4335-Chapter 5

Question 1

T.What is competency meant?

Answer 1

Competence: an activity that a company has learned to perform with efficiency-“what we can do”.
Core Competency: an activity that a company performs proficiently that is also central to its strategy and competitive success-“what we can do well”.
Distinctive Competency: a competitively important activity that a company performs better than its rivals-“what we can do better than others”.

Question 2

T.What are 5-step of using competencies to create competitive advantage?

Answer 2

1. Identify strengths and weaknesses.
   What is weakness? - Competitive deficiency, something a company lacks or does property ( inferior skills/intelligence, deficiency in increasing).
2. Categories/organize, then find core competencies - what we do well: organization based on profit potential, what will bring revenue? how does that core competencies compare to competition.
3. Appraise profit potential and identify distinctive competencies: Valuable-does it have value? Rare-does anyone else possess this competency? Inimitable-can’t it be easily imitated? Historical conditions, complex interaction among competencies. Organization-
   formulation generic, mission/vision/values goal, corporate strategy, global strategy, external environment.
4. Exploiting our distinctive competencies: know they are not static. This is where a company showed concentrate its time, effort, money. Definitely want to invest in this. Must be flexible -adopt to external situations.
5. Address weaknesses: Identify resource gaps and invest in upgrading weaknesses.

Question 3

What is value chain analysis meant?

Answer 3

The primary activities and related support activities that create customer value.

Question 4

What are 3 steps of corporate value chain analysis to conduct it?

Answer 4

1. Strengths and weaknesses - distinctive competencies.
2. Examine the “Linkages”: between our activities and how they impact one another maximize.
3. Examine Synergies: where can efficiencies be created. This is an example of economies of scope, which result when the value chains of 2 seperate products and services share activities, such as the same marking channels or manufacturing facilities. The cost of joint production of multiple products can be lower than the cost of seperate production.

Question 5

T*.What are the basic organizational structures?

Answer 5

1. Simple structure: Basic-small, entrepreneur/ dominated with one or two product lines: owner-workers.
2. Functional structure: medium size companies, several product lines in 1 industry, employees are specialists in different business functions.
3. Divisional structure: large company, several lines in several industries.

Question 6

T*. What are 2 variants of divisional structure?

Answer 6

1. Strategic business unit: each functional over has its own management.
   Must have: unique mission, identification competencies, external market focus, control of business functions.
2. Conglomerate: many product lines in unrelated industries.

Question 7

What is business model?

Answer 7

Business model is a company’s method for making money in the current business environment. It includes the key structural and operational characteristics of a firm-how it earns revenue and makes a profit.

Question 8

What are 5 elements that a business model compose?

Answer 8

Who it serves
What it provides
How it makes money
How it differentiates and sustains competitive advantage
How it provides its product/service