Strategy-Resource Link

Question 1

What is the dual role of company resources?

Answer 1

Resources act as
1. Fuel or assets required for the business to function
2. Potential sources of strategic competitive advantage

Question 2

What are the types of resources?

Answer 2

1. Tangibles like factories, human capital, marketing, R&D
2. Intangibles like brand and reputation
3. Organization capabilities like processes and culture

Question 3

What are strategic resources?

Answer 3

Non-tradable assets which develop and accumulate within the firm and are valuable in the industry.
These assets are hard to imitate because they are socially complex

Question 4

What are the key tasks of a manager related to resources?

Answer 4

1. Finding/investing in resources
2. Upgrading resources
3. Leveraging resources
4. Efficient usage
5. Understanding the impact of key resources/sets on competition in your industry

Question 5

What is a resource based strategy?

Answer 5

Strategies that attempt to exploit company resources to offer value to customers in a way rivals cannot match

Question 6

How can a resource-based strategy erode competitive potency of rivals?

Answer 6

By developing different resources that effectively substitute for the strengths of the rival

Question 7

What is the 4-part test for whether a resource is the basis for a sustainable competitive advantage in the resource-based view?

Answer 7

1. Resource must be valuable?
2. Resource must be rare, not many competitors have it
3. Resource must be inimitable so competitors cannot easily acquire it
4. Company needs to be organized to take advantage of the resource

Question 8

What kind of advantage do you get if your strategic resource is not valuable?

Answer 8

Competitive disadvantage

Question 9

What kind of advantage do you get if your strategic resource is valuable but not rare?

Answer 9

Competitive parity

Question 10

What kind of advantage do you get if your strategic resource is valuable and rare but not inimitable?

Answer 10

Temporary competitive advantage

Question 11

What kind of advantage do you get if your resource is valuable, rare, and inimitable?

Answer 11

A sustained competitive advantage

Question 12

When are resources strategically valuable?

Answer 12

1. Hard to copy
2. Depreciates slowly
3. Your company (not employees, suppliers, or customers) controls its value
4. It cannot be easily substituted
5. It is better than competitors’ similar resources

Question 13

What makes a resource hard to copy?

Answer 13

1. Physical uniqueness
2. Path dependency (unique historical events)
3. Causal ambiguity (many things unclearly coming together)
4. Economic deterrence (too expensive)

Question 14

What are the steps for resource analysis?

Answer 14

1. Develop/analyze the strategy
2. Identify resource and capability requirements for the strategy
3. Test the strategy resource link
4. Develop gap closing analysis
5. Move to next step of diamond-e

Question 15

What is value chain analysis?

Answer 15

Another way of performing resource analysis.
Determines resources shared across business units, identifies functional areas, links resources to functional areas, identifies competitive resources and capabilities

Question 16

What are some things we need to consider during gap analysis?

Answer 16

1. What resources/capabilities do we need to get?
2. What costs are associated with acquiring resources?
3. What is the probability of success?
4. What are the costs of failure?