Strategic Analysis Of A Firm Flashcards
What constitutes as a firms resources/ capabilities?
Anything the firm has that is used to deliver products/ services to customers
What is VRIO analysis (what does the acronym mean)?
Question of value
“ “rareness
“ “ imitability
“ “ organization
What is the question of value?
Does a firms resources enable it to exploit opportunities and/or neutralize threats?
Once a resource is considered valuable, will it remain that way? Why?
No, changes is tastes, tech, structure, and even the environment can lower the value of a resource
What is the purpose of asking about the value of a resource?
To link internal resources/ capabilities with an analysis of the environment (threats and opportunities)
What is the question of rareness?
Does the competition also have this valuable resource?
Valuable but common resources are a source of _____.
Competitive parity
Valuable and rare resources are a source of _____.
Competitive advantage
Why is it important to have a mix of rare and common valuable resources?
Valuable and common: contribute to firm survival
Valuable and rare: contribute to competitive advantage
What is the question of imitability?
How difficult is it for other firms to replicate resource
-the more difficult, the greater competitive advantage
What are the two types of resource imitation?
- 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
What are reasons for a possible cost disadvantage of imitating resources?
- importance of history in creating resources
- importance of numerous small decisions in developing resources
- importance of socially complex resources
What is the importance of a history in creating resources?
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
What is the importance of “numerous small decisions”?
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
What is the importance of socially complex resources? What are socially complex resources?
Socially are complex resources are hard to imitate.
Examples: reputation, trust, teamwork, culture
What is the question of organization?
Firm must be organized to exploit resources and capabilities
What are complimentary resources?
Components of firms organization that generate competitive advantage when used in tandem but would not do so when each is isolated
what is the resource based view?
firms can achieve superior performance compared to rivals in a sustained way
What is the capabilities perspective?
Capabilities are a set of business processess strategically understood that management can work on
what is the competencies perspective?
core competencies are the collective learning in the organization that can be coordinated
What is the dynamic capabilities perspective?
Ability to achieve new forms of competitve advantage through renewing compentencies (the dynamic part) to achieve harmony with the environment
SWOT analysis has gaps that need to be filled. How are they filled?
- VRIO analysis fills in the gaps of strength and weaknesses
- Porters’ five forces fill in the gaps of threats and opportunities
