Vorlesung 3 - Resources And Capabilities Analysis Flashcards
What is the rationale for the resource-based approach to strategy?
When the external environment is unstable, internal resources and capabilities provide a stable foundation for strategy. They are primary sources of a company’s profitability
Define Resources
Tangible and intangible assets used by a firm to implement strategies
Define Capabilities
The capacity to deploy resources effectively, often interchangeably used with resources
What are the types of resources?
Tangible resources: Financial, Physical, Technological, Organizational
Intangible resources: Human, Innovation, Reputational
Give examples of tangible resources and capabilities
Financial:
Ability to generate internal funds, raise external capital
Physical:
Plants, offices, equipments
Technological:
Patents, copyrights
Organizational:
Management systems, formal planning
What is the VRIO framework?
A tool to assess resources based on:
- Value: Do they add value?
- Rarity: How rare are they?
- Imitability: How hard is it to imitate them?
- Organization: How effectively are they leveraged?
How does VRIO help with competitive advantage?
Only resources that are valuable, rare, hard to imitate and well organized can sustain a competitive advantage
Explain why it is challenging to imitate certain capabilities
Difficulties arise from a competitor’s tike to develop resources, historical events and complex cause-effect relationships that are hard to replicate
Explain why it is challenging to imitate certain capabilities
Difficulties arise from a competitor’s tike to develop resources, historical events and complex cause-effect relationships that are hard to replicate
What are the main components of a value chain?
- Functional Analysis: Identifies resources/capabilities by examining organizational functions
- Value Chain Analysis: Analyzes the value creation process step-by-step in the firm’s activities
What strategies can firms use to develop capabilities?
- Outsource non-competitive activities
- Acquire resources through merges or alliances
- Develop capabilities internally in stages
- Use knowledge management for skill retention
How does competitive parity relate to common resources?
When two firms posses the same valuable, but common resources, they have competitive parity, meaning neither has an advantage over the other
What are core competencies?
Attributes that provide a competitive advantage by allowing the firm to perform better than competitors
What factors enhance the sustainability of a competitive advantage?
Embeddedness
Replicability
Durability
Relevance
Scarcity
Appropriability of resources
