Chapter 3: Internal Org.

Question 1

sustainable competitive advantage: 3 factors

Answer 1

1. rate of core competency obsolescence
2. availability of substitutes for core competencies
3. imitability of core competencies

Question 2

by analyzing internal organization => determine

Answer 2

what can do & what might do -> insights to select strategies

Question 3

volkswagen “strategy 2008”

Answer 3

international strategy and global mindset

use resources to form technological and innovation capabilities => (2 core competencies) 1. superior customer service 2. product quality

Question 4

2 most important sources of comp. adv

Answer 4

1. cc
2. product mkt placement

Question 5

3 challenges of internal analysis

Answer 5

1. decisions = non-routine, ethical implications, influence ability to earn avg. > return
2. mistake: thinking a capability is a core competency when its no. (ex. polaroid)
3. 3 conditions affect managerial decisions => require judgment (exec -> 1. reputation 2. loyalty)

Question 6

3 challenges of internal analysis: 3 conditions affect managerial decisions

Answer 6

1. uncertainty
2. complexity
3. intraorg. conflict

Question 7

3 challenges of internal analysis: 3 conditions affect managerial decisions: uncertainty

Answer 7

increases complexity & range of issues

1. new proprietary tech
2. rapid changing trends
3. transformations in societal values
4. shifts in customers demands

plus “5” biases

Question 8

example: subway and amazon

Answer 8

ABL resources

Question 9

tangible resources

Answer 9

• hard to leverage
• add’l value
• unique/intangible attributes

Question 10

4 categories of tangible resources

Answer 10

1. financial
2. organizational
3. physical
4. technological

Question 11

which resource is the superior source

Answer 11

intangible

Question 12

3 categories of intangible resources

Answer 12

1. Human resources/capital
2. innovation resources
3. reputational resources

Question 13

3 categories of intangible resources: human resources/capital

Answer 13

• knowledge
• trust
• skills
• abilities to collaborate with others

Question 14

3 categories of intangible resources: innovation resources

Answer 14

• ideas
• scientific capabilities
• capacity to innovate

Question 15

3 categories of intangible resources: reputational resources

Answer 15

1. brand name
2. positive reputation with stakeholders
3. perceptions of product quality, durability, reliability

Question 16

intangible resources

Answer 16

can be leveraged

invisible, unobservable

Question 17

capabilities - 7 functional areas

Answer 17

1. distribution
2. HR
3. MIS
4. MKTG
5. MGMT
6. manufacturing
7. R&D

Question 18

example: walmart

Answer 18

capabilities: distribution & MIS

Question 19

example: microsoft

Answer 19

capabilities: HR

Question 20

example: ralph lauren, mckinsey, P&G, nordstoms, crate and barrel

Answer 20

capabilities: marketing

Question 21

example: zara, hugo boss

Answer 21

capabilities: management

Question 22

example: komatsu, witt gas technology, sony

Answer 22

capabilities: manufacturing

Question 23

example: caterpillar, otis, chaparral steel, thomson consumer electronics

Answer 23

capabilities: R&D

Question 24

building core competencies (2 tools)

Answer 24

1. 4 criteria of sustainable comp adv.
2. value-chain analysis

Question 25

4 criteria of sustainable comp. adv.

Answer 25

1. valuable (customer POV) 2. rare (customer POV) 3. costly to imitate (competitor POV) 4. nonsubstitutable (competitor POV)

Question 26

costly to imitate: 3 reasons

Answer 26

1. unique historical conditions 2. causually ambiguous 3. social complexity

Question 27

outcomes from combinations of the 4 criteria for sustainable comp adv: competitive consequences

Answer 27

1. comp disadvantage 2. competitive parity 3. temporary comp adv. 4. sustainable comp adv.

Question 28

competitive consequence: competitive disadvantage

Answer 28

NOT: valuable, rare, costly to imitate, nonsubstitutable =\> below average %

Question 29

competitive consequence: competitive parity

Answer 29

valuable and nonsubstitutable NOT: rare or costly to imitate =\> average returns

Question 30

competitive consequence: temporary competitive adv.

Answer 30

valuable, rare, nonsubstitutable NOT: costly to imitate =\> avg. \< or equal returns

Question 31

competitive consequence: sustainable competitive adv

Answer 31

valuable, rare, costly to imitate, nonsubstitutable =\> avg. \< returns

Question 32

(valuable) capabilities must allow the firm to:

Answer 32

(1) perform any activity in a manner that provides superior value or (2) perform VCA that competitors cannot perform

Question 33

relationships with customers

Answer 33

aka "social capital" - knowledge transfer - access to external resources

Question 34

outsourcing: goals

Answer 34

1. increases flexibility 2. mitigates risk 3. reduces capital investments

Question 35

outsourcing: only activities where they _________ =\> outsource

Answer 35

1. cannot create value 2. where they are at a substantial disadv. compared to competitors

Question 36

outsourcing: 2 issues to consider

Answer 36

1. innovation 2. technology uncertainty

Question 37

external environment conditions -\> CCs -\> change:

Answer 37

1. core rigidities 2. generate inertia 3. stifle innovation

Question 38

CCs (internal) + opportunities (external) =\>

Answer 38

strategic competitiveness and above avg returns