Core Capabilities & Core Rigidities, Leonard Barton (1992) (Article) Flashcards Preview

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Flashcards in Core Capabilities & Core Rigidities, Leonard Barton (1992) (Article) Deck (23)
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1
Q

Capabilities are considered core if…

A

they differentiate a company strategically

2
Q

What is an alternative name for core capabilities

A

Distinctive competencies

3
Q

Institutionalised capabilities may lead to what in the face of environmental changes

A

Incumbent inertia

4
Q

Technological discontinuities can

A

Enhance or destroy existing competencies within an industry

5
Q

All innovation necessarily requires:

A

Some degree of ‘creative destruction’ (Schumpeter, 1942)

6
Q

What is the paradox?

A

Core capabilities simultaneously enhance and inhibit development

7
Q

Development projects reveal…

A

Friction between technology strategy and current corporate practices + spearhead potential new strategic directions

8
Q

In a knowledge based view of a firm, what are the 4 dimensions to a knowledge set?

A

1) Knowledge and skills
2) Technical systems
3) Managerial systems
4) Values and norms

9
Q

What does VRIN stand for?

A

Value
Rarity
Imitatability
Non-substitutability

10
Q

Strategic capabilities are of value when they:

A

take advantage of opportunities and neutralise threats,

provide value to customers

provide potential competitive advantage

at a cost that allows an organisation to realise acceptable levels of return

11
Q

Rarity

A

Rare capabilities = possessed uniquely by one organisation or by a few others only.
e.g. a company may have patented products, have supremely talented people or a powerful brand.

Rarity can be temporary.
Eg: Patents expire, key individuals can leave or brands can be de-valued by adverse publicity
“Think of the success of Sir Alex Ferguson?”

12
Q

Inimitability

A

Those that competitors find difficult to imitate (copy) or obtain

Competitive advantage can be built on unique resources (e.g. a key individual or IT system) but these may not be sustainable.

13
Q

Non-substitutability


A

Threat of substitution.

Product or service substitution from a different industry/market.
For example, postal services partly substituted by e-mail.
CDs and MP3s

R&C substitution, e.g. a skill substituted by expert systems or IT solutions.

14
Q

Benchmarking

A

Means of understanding how an organisation compares with others.

15
Q

What are the 2 main approaches to benchmarking?

A

Industry/sector benchmarking

Best-in-class benchmarking

16
Q

Name tools that can be used:

A

financial ratios (CORE);
systems analysis;
value chain analysis

17
Q

Who coined Value chain analysis?

A

(Porter, 1985)

18
Q

What is value chain analysis?

A

A tool that maps the sequence of events that lead to the company’s competitive advantage

19
Q

What does VCA do?

A

Helps determine strengths & weaknesses

Focuses on how activities add (lose) value

20
Q

What are 2 different approaches to VCA?

A

Cost advantage

Differentiation advantage

21
Q

Cost advantage

A

Used when organizations try to compete on costs and want to understand the sources of their cost advantage or disadvantage and what factors drive those costs.

22
Q

Differentiation advantage

A

Firms that strive to create superior products or services use differentiation advantage approach

23
Q

The Value Chain analysis prompts 4 fundamental questions worth asking:

A

1) Do the support activities truly add value?
2) Should we buy or make?
3) What linkages in the chain truly provide more than competitors ?
4) How can the chain be reconfigured to either lower costs or increase customer benefits ?