Resources & Capabilities Analysis Flashcards
What is the Resource-Based View of Strategy?
In a volatile environment, internal resources & capabilities offer more secure/stable basis for strategy than focussing on the industry & customer needs.
Resources & capabilities = primary sources of competitive advantage.
What are Resources & Capabilities?
Resources are assets that organisations have or can call upon.
Capabilities (/competences) are the ways those assets are used or deployed.
Contributes to LR survival & potential to competitive advantage.
What are Threshold Resources & Capabilities?
Amount needed for organisation to meet necessary requirements to compete in a given market and achieve parity with competitors in that market.
Qualifiers.
What are Distinctive Resources & Capabilities?
Amount needed to achieve competitive advantage.
Distinctive capabilities that are of value to customers and which competitors find difficult to imitate.
Winners.
Sustained competitive advantage.
What are the Components of the VRIO Framework?
Assesses R&C in terms of providing basis of achieving sustainable competitive advantage:
Value
Rarity
Inimitability
Organisational Support
How does Value Assess R&C?
- Determines whether R&C’s take advantage of opportunities and neutralise threats
- Provides value to customers
- Are provided at a cost that still allows an organisation to make an acceptable return.
How does Rarity Assess R&C?
Rare capabilities are those possessed uniquely by one organisation or only by a few (patented products, supremely talented people, or powerful brands).
Rarity could be temporary.
How does Inimitability Assess R&C?
Competitors find it difficult and costly to imitate capabilities.
Competitive advantage can be built on unique resources.
Not always sustainable competitive advantage. Instead achieved via competences.
What are Competences?
The way resources are managed, developed and deployed.
Sustainable competitive advantage often found in how competences are linked and integrated together.
Criteria for Inimitability:
Complexity -
* Resources & capabilities based on organisations internal and external complicated linkages.
Casual ambiguity -
* Competitors can’t identify particular resources and capabilities that are cause of competitive advantage.
Culture and history -
* Resources developed due to historical events or over a long period are usually difficult and costly to imitate.
What is Organisational Knowledge?
Collective intelligence specific to organisation.
- Explicit/objective knowledge transmitted as files/manuals in a formal systematic way.
- Tactical knowledge is more personal, context-specific and harder to communicate. Difficult for other organisations to imitate.
Why is it Important to Fulfil the VRIO Criteria?
Will all organisation to be distinctive and provide for sustainable competitive advantage, resources and capabilities.
What is Benchmarking?
Understanding of how organisation compares to competitors. There are 2 types:
* Industry/Sector Benchmarking
* Best-in-Class Benchmarking
What is Industry/Sector Benchmarking?
Compares organisations performance against competitors according to a set of performance indicators.
What is Best-in-Class Benchmarking?
Compare against “best-in-class” performance, even in a very different industry.
E.g. BA benchmark its refuelling operations against F1 racing pit stops.
