Internal Flashcards
(24 cards)
Resource
Is a productive input or competitive asset that is owned or controlled by a company
- tangible or intangible
Capability
Is the capacity of a firm to perform some activity proficiently using organizational and/or managerial skills (superior marketing skills)
Organizational capability
- Is firm’s capacity to deploy resources, purposely integrated to achieve a desired state
- Emerges over time through complex interactions among tangible and intangible resources
- Is the intangible but observable capacity of a firm to perform a critical activity proficiently using a related combination (cross-functional bundle) of its resources
- Its knowledge-based, residing in people and in a firm’s intellectual capital or in its organizational processes and functional systems, which embody tacit knowledge
- Often are based on developing and exchanging information and knowledge through the firm’s human capital
Core Competencies
- Capability that underlies the various products/services offered by a firm
- Provides access to a wide variety of markets
Makes a significant contribution to perceived customer benefits of the end product
Results in
- Creating higher value for the customer
- Offering products and services at lower costs
Resource Based View of the Firm
- value
- rarity
- inimitabilty
- organized to capture value
Value
contect of industry dependent
Rarity
necessary but not sufficient for competitive advantage
Inimitability - difficult to immitate
Path dependency
Causal ambiguity
Social complexity
Organized to capture value
Organizational culture
Organizational structure
Critical Assumptions of the RBV
Resource Heterogeneity
Resource immobility
Resource Heterogeneity
- A firm is a unique bundle of resources and capabilities
- These bundles differ across firms
Resource immobility
- Resources do not move easily from firm to firm
- Resources are difficult to replicate
- Resources can last for a long time
Valuable
Helps exploit an opportunity or offset a threat
Rare if
Only one of a few firms possess it
Costly to imitate if
Competitors can’t develop the resource for a reasonable price
Barriers to imitation
- better expectations of future resource value
- path dependence
- casual ambiguity
- social complexity
- IP
Better expectations of future resource value
Buy resources at a low cost
First mover advantage
Path dependence
- Current alternatives are limited by past decisions
- Decisions evolve over a long period of time
Causal ambiguity
- Causes of success or failure is not apparent
Inputs and outputs are observable but not the process - Equifinality (multiple paths to the same outcome) creates challenges to imitation
Social complexity
- Two or more systems interact creating many possibilities
- Tacit knowledge (processes, routines, and interactions) are less apparent to competitors
Value Chain Analysis
- Internal activities a firm engages in when transforming inputs into outputs
- Through primary and support activities
- Shows how a product moves from raw material stage to the final customer
- Each activity adds incremental costs and value
- Allows the firm to understand the parts of its operations that create value and those that do not
- Permits a deep look at the firm’s cost structure and ability to offer low prices
Value chain as a competitive advanatge
- An activity superior to how rivals perform
- A value creating activity that rivals cannot complete
Primary activities:
firm activists that add value directly by transforming inputs into outputs as firms move a product/service horizontally along the internal value chain
- moves product/service horizontally that add value along the internal value chain
- supply chain, marketing
Support activities:
firm activities that add value indirectly, but are necessary to sustain primary activities
R&D, information systems, HR, accounting/finance, firm infrastructure (processes, policies, and procedures)
