Week 3 - Developing strategic capability Flashcards
What are strategic capabilities?
PFH
The resources and competencies of an organisation that contribute to long-term survival or competitive advantage.
3 types:
Physical
Financial
Human
What is the resource-based view of strategy?
Distinctiveness of capabilities provide CA ie: vrin as compared to competitors
(Value, Rare, Inimitable, No substitute).
The 2 components of strategic capability are resources and competencies. Typically, strategic capabilities have a mix of both - define them.
- Resources (what we have) the assets that organisations have or can call upon e.g. from partners or suppliers
- Competencies (what we do well) the ways those assets are used or deployed effectively
What are dynamic capabilities and their 3 generic parts
SSR
Dynamic capabilities: an organisation’s ability to renew and recreate its strategic capabilities to meet the needs of changing environments.
- Sensing - understanding strategic position
- seizing - making strategic choices
- re-configuring - i enacting strategies.
What is the difference between threshold and distinctive capabilities?
Threshold capabilities - needed for an organisation to meet the necessary requirements to compete in a given market and achieve parity with competitors
Distinctive capabilities – underpin the ability to provide value to customers and which competitors find difficult to imitate
Define core competencies
The linked set of skills, activities and resources in distinctive capabilities that:
- Delivering customer value
- Differentiate a business from competitors
- Can be extended and developed.
Strategic capabilities provide sustainable basis of CA the more they resemble the VRIN criteria.
Valuable
Rare
Inimitable -complexity, causally ambiguous, culturally based, change, linkages
Non substitutable - at the product or competency level
What is the role of org knowledge as a basis for CA
Org knowledge - Collective intelligence, specific to org, accumulated through share experience.
Store explicitly - transferrable, consistent
Tacit - personal, exists in the person
The knowledge and how it is stored makes it a capability that is difficult to copy,
There are different tools for diagnosing strategic capabilities. Define and discuss benchmarking
A means of understanding how an organisation compares with others. Industry or sector basis.
Pros –
• comparison
• Challenges mindsets
Cons –
• Assumes industries healthy
• ID’s position not causality
• Measuring Wrong factor distorts picture
There are different tools for diagnosing strategic capabilities. Discuss the value chain
Identifies the primary and support activities that together, provide value to customer
3 purposes:
Describes and identifies activities
Analysis competitive position
Cost and benefit of activities
There are different tools for diagnosing strategic capabilities. Discuss the value network
Value network - inter-organisational links and relationships that are necessary to create a product or service.
Uses: ID activites and cost/price structures of the value network • Id profit pools • Make or buy? • Partnering
There are different tools for diagnosing strategic capabilities. Discuss mapping activity systems
Strategic resource deployment expressed in activities. Mapping them and their value verifies this.
discuss a SWOT analysis
SWOT summarises the strengths, weaknesses, opportunities and threats likely to impact on strategy development.
Pros
- Overall strategic view
- Basis for future courses
How can managers develop strategic capability?
MICE
Suggested methods:
Monitor outputs and benefits
Internal capability development
Ceasing activities - (cut, outsource, reduce cost)
External capability acquisition
How can managing people support the development of strategic capability?
TALS
- Targeted training and development
- Awareness that what people do in their jobs matters at a strategic level.
- Learning organisations – dynamic capability to readjust bases of CA
- Staffing policies to develop particular competencies
