week 3 internal env

Question 1

Firms share the same industry conditions but can generate above average returns in their industry why?-

Answer 1

how the firm runs inside the org

Question 2

The way of earning above average returns

Answer 2

Cost advantage: processes tech, size advantages, access to low cost inputs (walmart )
Differentiation advantage: brands, product tech, marketing, distribution and service capabilities (apple)

Question 3

core competencies

Answer 3

firms distinct talents aka crown jewels, processes perfected over time, signature approaches to conducting business, distinguish a company comoeitivey and reflect its personality

Question 4

tools to conduct internal analysis

Answer 4

Resource based view approach
Value chain analysis
Strength and weaknesses analysis (SW part of the swot)

Question 5

desired outcome to conducting internal analysis

Answer 5

We want to understand internal activities
Want to find the edge a firm might have over competitors
Identify possible areas of improvement and devise corresponding strategies

Question 6

what are the six resources

Answer 6

financial, human, physical, technological, reputation, organizational

Question 7

financial

Answer 7

could be related to a parent company that already has capital to aide

Question 8

Human Resources

Answer 8

may have the best talent , related to the financial resources (if you oay more you attract better people), can the firm retain talented employees

Question 9

physical resources

Answer 9

doesn’t apply to all companies, some may have factories or facilities ex: amazon invests millions into robots at their huge fulfillment centers, another could be Starbucks with its vast network of prime locations

Question 10

technological

Answer 10

any tech development, patents, copyrights, intellectual property, online platforms

Question 11

reputation resources

Answer 11

some companies have a powerful brand (can sell more bc of the brand, sell products at a higher price )

Question 12

organizational resources

Answer 12

the way the company is set up, the way its made into teams and divided up, if it has geographical presence all over the world
All 6 are interlinked

Question 13

what do resources lead to

Answer 13

capabilities (strengths)

Question 14

what do capabilities lead to

Answer 14

core competencies

Question 15

what are the different criteria that a capability needs to be in order to be a core competency

Answer 15

rare, valuable, costly to imitate, nonsubstituabe

Question 16

valuable

Answer 16

valuable ex: Netflix vast selection of content vs blockbusters former vast physical distribution network

Question 17

rare

Answer 17

Needs to be rare, coca-cola and PepsiCo have valuable but similar capabilities and have struggled for decades to create an advantage. They Compete on marketing and being more available

Question 18

costly to imitate

Answer 18

If you have an advantage that is easy for competitors to copy, not good and not sustainable
Amazon has perfected customer experience, has invested tons in technology and personalized recommendations

Question 19

non substitutable

Answer 19

Not have any strategic equivalents
Dell pioneered a cost-effective direct-to-consumer online sales model, but HP achieved the same cost savings through operational efficiencies

Question 20

value chain analysis

Answer 20

allows us to dissect the companies activities internally to see which activities create value

Question 21

two sets of core activities in value chain?

Answer 21

support and core activities

Question 22

core activities

Answer 22

Supply chain management→ the quality suppliers deliver to you, etc
Operations→ how you transform the raw materials into the finished product, ho wwe add to the quality
Distribution→ how we get our finished product to consumers or other businesses: online, retail stores, etc
Marketing and sales: how the company does its marketing (does it hire externally and complete its marketing internally)
Follow-up service: repairs, warrantees, etc

Question 23

surooting activities

Answer 23

finance: how the company manages finances, could add value
Human resource management: need talent to execute
Management information systems: what tech are we using to support our main activities

Question 24

resourced based view

Answer 24

looking at different aspects, not to miss anything, looking at how much better the resources are and if they serve as a competitive advantage

Question 25

Value chain analysis is useful to:

Answer 25

Identify firms activities that create value as well as spot these that dont→ the firm can then decide to either improve non value creating activities or outsource them to outside experts
Evaluate and critique pricing and profit margins that the firm established for its product/ services
Recognize conflicting activities and make corrections to ensure alignment
Trace and understand the firm’s business-level strategy or lack thereof

Question 26

what is outsourcing

Answer 26

purchase of a value creating activity from an external supplier. Firms should outsource activities where they cannot create value or are at a substantial disadvantage compared to competitor

Question 27

advantages of outsourcing

Answer 27

Flexibility to change suppliers
Predictability of costs by not having to run project internally
Reduction in capital investment
Improved quality when rely on expertise of another firm,
Ability to concentrate on core activity

Question 28

disadvantage of outsourcing

Answer 28

limited control over outsourced functions and completion timelines
Limited differentiation
Loss of domestic jobs when outsourcing overseas
Risk of intellectual property theft