Chapter 5 Flashcards
(27 cards)
Resource based view of the firm
The firm’s resources and capabilities are viewed as a more secure base in the case of constant flux
2 sources of superior profitability
Industry attractiveness and competitive advantage
Profits arising from market power
Monopoly rents
Profits arising from superior resources
Ricardian rents-return earned by a scarce resource over and above the cost of bringing it into production
3 types of resources
Tangible(financial-cash,securities,borrowing capacity/physical-plant,equipment,land,mineral reserves),intangible(technology-patents,trade secrets,copyrights,knowledge,business processes/reputation-brands,relationships,market portfolio/culture),human(skills,know-how/capacity for communication and collaboration/motivation)
Tangible resources
Easiest to identify and evaluate,from fin.statements,how to create value from the resources
Intangible resources
More valuable than tangible,but still they remain almost invisible on fin.statements,reputational assets:their value is in the confidence they instill in customers,technology is also not evident from firm’s balance sheet
Human resources
Expertise and effort offered by employees,HR are included as a resource because of their stability
Competency modelling
Identifying the set of skills,content knowledge,attributes and values associated with superior performers within a particular job category,then assessing each employee against that profile
Emotional intelligence
Hire for attitude,train for skills
Org.culture
Org’s values,traditions and social norms
Org.capability
Firm’s capacity to deploy resources for a desired end result
Distinctive competencies
Things that an organizatiom does particulary well relatively to its competitors
Core competencies
Those capabilities fundamental to a firm’s strategy and performance,basis for entering new markets,contribution to ultimate customer value
2 ways to classify firm’s capabilities
Functional analysis(identifies org.cap. in relation to each of the principal functional areas of the firm)Value chain analysis(separates the activities of the firm into a sequential chain
Porters value chain
Primary activities(inbound logistics,operations,outbound logistics,marketing and sales,service)Support activities(firm infrastructure,procurement,HR management,techn.development)
Org.process
Sequence of actions through which a specific task is performed
Org.routinizes
Regular and predictable beh.patterns comprising repetitive patterms of activity
2 conditions to establish comp.adv.
Scarcity(if a resource is widely available it may not be counted as a comp.adv.) Relevance(relevant to the key success factors in the market)
2 factors in sustaining comp.adv.
Durability(some resources are more durable,more secure basis for comp.adv.)Transferability(the ability to buy a resource or cap.,the extent to which it is mobile between companies)
Sources of mobility
Finance,raw materials,components,machines produced by equipment suppliers,employees with standardized skills
Sources of immobility
Geographical immobility of natural resources,large items of capital equipmentband sone types of employees,org.cap.
Replicability
If a firm cannot buy a res. or cap.=build it
Asset mass efficiencies
Occurs where a strong initial position in technology,distribution channels or reputation facilitates the subsequent accumulation pf these resources
