Strategic Analysis Of A Firm

Question 1

What constitutes as a firms resources/ capabilities?

Answer 1

Anything the firm has that is used to deliver products/ services to customers

Question 2

What is VRIO analysis (what does the acronym mean)?

Answer 2

Question of value
“ “rareness
“ “ imitability
“ “ organization

Question 3

What is the question of value?

Answer 3

Does a firms resources enable it to exploit opportunities and/or neutralize threats?

Question 4

Once a resource is considered valuable, will it remain that way? Why?

Answer 4

No, changes is tastes, tech, structure, and even the environment can lower the value of a resource

Question 5

What is the purpose of asking about the value of a resource?

Answer 5

To link internal resources/ capabilities with an analysis of the environment (threats and opportunities)

Question 6

What is the question of rareness?

Answer 6

Does the competition also have this valuable resource?

Question 7

Valuable but common resources are a source of _____.

Answer 7

Competitive parity

Question 8

Valuable and rare resources are a source of _____.

Answer 8

Competitive advantage

Question 9

Why is it important to have a mix of rare and common valuable resources?

Answer 9

Valuable and common: contribute to firm survival
Valuable and rare: contribute to competitive advantage

Question 10

What is the question of imitability?

Answer 10

How difficult is it for other firms to replicate resource
-the more difficult, the greater competitive advantage

Question 11

What are the two types of resource imitation?

Answer 11

• Duplication: imitating firm builds the same kind of resource as the original firm
• substitution: resource is not the same but performs same function at no extra cost

Question 12

What are reasons for a possible cost disadvantage of imitating resources?

Answer 12

• importance of history in creating resources
• importance of numerous small decisions in developing resources
• importance of socially complex resources

Question 13

What is the importance of a history in creating resources?

Answer 13

Development of a firms resources can be the result of historical events, and are reflected in unique personalities, experiences, and relationships of that firm. Thus, imitating them could come with a large cost disadvantage to another firm

Question 14

What is the importance of “numerous small decisions”?

Answer 14

The development and exploitation of resources is often driven by many small decisions that the firm makes. While a competitor can see the consequences of these small decisions it is harder for them to understand and imitate those small decisions

Question 15

What is the importance of socially complex resources? What are socially complex resources?

Answer 15

Socially are complex resources are hard to imitate.
Examples: reputation, trust, teamwork, culture

Question 16

What is the question of organization?

Answer 16

Firm must be organized to exploit resources and capabilities

Question 17

What are complimentary resources?

Answer 17

Components of firms organization that generate competitive advantage when used in tandem but would not do so when each is isolated

Question 18

what is the resource based view?

Answer 18

firms can achieve superior performance compared to rivals in a sustained way

Question 19

What is the capabilities perspective?

Answer 19

Capabilities are a set of business processess strategically understood that management can work on

Question 20

what is the competencies perspective?

Answer 20

core competencies are the collective learning in the organization that can be coordinated

Question 21

What is the dynamic capabilities perspective?

Answer 21

Ability to achieve new forms of competitve advantage through renewing compentencies (the dynamic part) to achieve harmony with the environment

Question 22

SWOT analysis has gaps that need to be filled. How are they filled?

Answer 22

• VRIO analysis fills in the gaps of strength and weaknesses
• Porters’ five forces fill in the gaps of threats and opportunities