Chapter 4: Internal Analysis Flashcards
(32 cards)
resources + capabilities = ____ __________
firms should consciously work to identify these.
core competencies
core competencies
unique strengths embedded deep in a firm allowing it to differentiate from rivals
core competencies are critical to gaining a ______ _______ ________
sustainable competitive advantage
core competencies are expressed through (3)
structures
processes
routines
resources
any assets a firm can draw on
ex. cash, buildings
capabilities
organizational and managerial skills
ex. routine, culture
activities
distinct, fine-grained business processes
core competencies that are not _____ _______ will eventually lose their ability to yield competitive advantage
continuously nourished
resource-based view
model that aids in identifying core competencies, specifically resources as they’re the key to firm performance
categories of resources (2)
tangible
intangible
2 critical assumptions of Resource-Based View
resource heterogeneity
resource immobility
resource heterogeneity
a firm is a unique bundle of resources, capabilities, and competencies; these bundles differ across firms
resource immobility
resources are “sticky” and don’t move easily from firm to firm;
they are difficulty to replicate and can last a long time
VRIO framework
tool for evaluating firm resource environments
to be the basis of competitive advantage, a resource must be (4)
valuable
rare
costly to imitate
organized to capture the value of the resource
a resource should be valuable, meaning…
it helps exploit an opportunity or offset a threat
a resource should be rare, meaning…
one or few firms possesses it
a resource should be costly to imitate, meaning…
there should be high barriers
a resource should be organized to capture its value, meaning…
there should be effective internal organizational structure and systems
isolating mechanisms
barriers to imitation; protects resources that underlie a firm’s competitive advantage
path dependence
where we are today is a result of what has happened in the past
time compression diseconomies
additional costs incurred by seeking to quickly gain resources that should be accumulated over a long period of time
causal ambiguity
situation where cause and effect are not readily apparent; “why exactly is it working so well?”
complexity/interconnectedness
multiple elements interacting with one another making imitation difficult
