S.2.4 Developing Resources and Capabilities

Question 1

The role of the value chain

Answer 1

„Competitive Advantage cannot be understood by
looking at a firm as a whole. It stems from the many
discrete activities a firm performs in designing,
producing, marketing, delivering, and supporting its
products.“ (Porter)

Question 2

Source of cost advantage

Answer 2

• ECONOMIES OF SCALE
• ECONOMIES OF LEARNING
• PROCESS TECHNOLOGY
• PRODUCT DESIGN
• INPUT COSTS
• CAPACITY UTILIZATION
• RESIDUAL EFFICIENCY

Question 3

Sources of differentiation

Answer 3

• Characteristics of the buyers

- Characteristics of the product

Question 4

The Resource-Based Framework: Assumptions

Answer 4

-Firms are heterogeneously equipped with resources. (Heterogeneity of Resources)
-These resource differences may persist (Immobility of
Resources)

Question 5

Barney‘s VRIN Framework:

Answer 5

valuable, rare, imperfectly Imitable, non-substitutable

Question 6

Resource-based view: Critique

Answer 6

-The term “resource“has been defined extremely vague
-Interpretation and strategic evaluation of resources by
managers are exogenous variables, according to RBV
-RBV does not provide any support or devices for strategic management in practice
-It is not resolved where changes in resources and expertise derive from

Question 7

Dynamic capabilities:

Answer 7

“Dynamic Capabilities are the ability to determine

whether the organization is performing the right activities, and then effectuate necessary change” (Teece 2010)

Question 8

Three key capabilities

Answer 8

• Learning (dynamic concept)
• Coordination/integration (static concept)
• Reconfiguration (transformational concept)

Question 9

Learning (dynamic concept)

Answer 9

-Learning quickly and learning to build strategic
assets (activities)
-Repetition and experimentation enables tasks to be performed better and quicker
-Identification of new production opportunities

Question 10

Coordination/integration (static concept)

Answer 10

• Integrating strategic assets (activities) within the company
• Strategic advantage requires the integration of external activities and technologies (e.g. alliances, virtual corporations, buyer- supplier relations)

Question 11

Reconfiguration (transformational concept)

Answer 11

• Transforming or reconfiguring strategic assets (activities)
• Adaptation of the resource structure to changes in the environment