Articles on Internal context Flashcards
(29 cards)
What is the resource based view?
Resource-based view: view on strategy that combines internal analysis of phenomena within companies with external analysis of industry and competitive environment.
Name three things the resource-based view explains?
- Why some competitors are more profitable than others
- How to put idea of core competences in practice
- How to develop diversification strategies.
Name 3 different types of resources?
- Physical resources
- Intangible resources
- Organizational capabilities
What is superior performance based on?
Superior performance is based on developing a competitively distinct set of resources and deploying them in a well-conceived strategy.
Name 5 external market tests to determine the value of an organization’s resources
- Inimitability
- Durability
- Appropriability
- Substitutability
- Competitive superiority
What are the four possible characteristics of inimitable resources?
- Physical uniqueness
- Path dependencies
- Causal ambiguity
- Economic deterrence
What is path dependency?
resources are unique and scares because of all that has happened along the path taken in their accumulation.
What is causal ambiguity?
It is unclear what the valuable resource is and how to re-create it. Often organizational capabilities
What is economic deterrence?
Companies deter competitors by making sizable investments in an asset. Most likely when strategy is built around large capital investments both scale sensitive and specific to a given market.
What is meant with durability?
How quickly does a resource depreciate. Can sustainable competitive advantages be maintained over time. It is hard as most resources will be copied, which ends your firm’s competitive advantage
What is meant with appropriability?
Not all profits form a resource go to the firm, sometimes also to customers, employees etc. Basing a strategy on resources not inextricably bound to the company can make profits hard to capture.
How do you find a firm’s competitive superiority?
whose resource is better?
This has to be an external assessment about what activities a company performs better than all its competitors..
Solution: disaggregate corporation’s resources into subcategories. Specificity provides better overview of the firm’s uniqueness.
Name two things competitive advantage is caused by:
- Weighted average of resources
- System-integration capability
Name two things companies have to continuously invest in to maintain and strengthen their competitive position?
Companies have to continuously invest in their resources in order to maintain and strengthen their competitive advantage.
Companies must continuously invest in upgrading their resources in both number and quality of resources and associated competitive positions in order to hold off the almost inevitable decay of their value.
What is the inside-out view?
Considers the resources and capabilities of the firm as the starting point of sustainable competitive advantages
What is the outside-in view?
Considers customers and marketplace changes as the starting point of a sustainable competitive advantages, and only secondarily examining how the firm can respond, which implicitly also asks about the resources of the firm.
What is meant with the balancing approach to competitive advantage?
competitive advantage can be obtained when firms balance perspectives form inside-out and outside-in views. It can achieve complementarities benefitting the firm.
Why should firms use both inside-out and outside-in views?
Using both creates the dual process of opportunity discovery and resource deployment. Not doing so results in reinforcing cycles risking developing partial and incomplete managerial solutions.
Name three social mechanisms within the outside-in approach?
- Macro-micro mechanism: explain how macro conditions or contexts influence actors
- Action-formation mechanisms: describe actions and interactions between individual actors at the micro-levels
- Transformational mechanisms: explain how actors can influence macro-level levels via their actions and interactions.
What is the market-driven approach (macro-micro mechanism)
Companies proactively engage in exploration of service ecosystem with market-sensing
Market-sensing: vigilance of smallest deviations in market to find uncovered market opportunities and make accurate productions about reactions to market initiatives
What are the three mechanisms of market-sensing?
- Sensing: open-minded attitude looking for intelligence without confirmation bias
- Sense-making: insights transformed into mental models supporting effective use of market strategies
- Reflection: evaluation of effectiveness of entire market-sensing process.
What are the two characteristics of market linking (micro-micro mechanism)
Companies create exceptional value by developing game-changing products, build stronger relationships with customers and generate more differentiation, all because firms recognize market signals.
Extent to which organizations maintain long-term relationships with consumers and suppliers, with an emphasis on need for networking and social capital in the acquisition of network resources.
Name the 5 steps to clarify core competencies and build competitive advantage?
- Articulate strategic intent
- Identify core competences supporting that intent
- Build core competencies
- Cultivate core-competency mindset
Name the two characteristics of market driving (micro-macro mechanism)
Explorative behaviors challenging existing notions and leading to influencing the structure of the market and/or behavior or market players in a beneficial way for the firm.
Market driving perspective requires continuous improvement of leaders’ and stakeholders’ judgment via extensive market sensing, along with speedy experimentation.
