Week 4 - Internal enviroment analysis

Question 1

What is a resource based view?

Answer 1

competitive advantage and superior performance of an organisation - explained by the distinctness of its capabilities
- AKA capabilities view

Question 2

What is a strategic capability

Answer 2

capabilities of the organisation that contribute to its long-term survival or competitive advantage.

• cannot be static - need to change
• Resources ) (What we have) + competences (What we do well)

Question 3

what is a Dynamic capability?

Answer 3

An organisation’s ability to renew and recreate its strategic capabilities to meet the needs of changing environments. eg: Win tomorrow

Question 4

Teece’s three generic types of dynamic capabilities .

Answer 4

1) Sensing – organisation must constantly scan, search and explore opportunities across various markets and technologies .
2) Seizing- once opportunities sensed needs to be seized by new products or services,
3) Reconfiguring – to seize opportunity may require renewal and reconfiguration of organisation capabilities and investments in technologies, manufacturing, markets etc

Question 5

what are Resources, Competences, Capabilities?

Answer 5

• Resources: Assets you have
• Competences: Skills you have
• Capabilities: Adequacy and suitability of resources and competences to enable the organization to survive and prosper

Question 6

What are some enviromental analysis tools?

Answer 6

• Resources + Competences
• Threshold, distinctive, dynamic
• Value, Rarity, Inimitability, Organisational support
• Value chain/network

Question 7

What is a core competency?

Answer 7

A core competence is an activity or process that critically underpins competitive advantage and ability to add value

• what is done better
• why these are done better
• why secondary processes are done

Question 8

examples of core competencies

Answer 8

• Expertise in integrating multiple technologies
• Know-how in creating operating systems
• Speeding new/next-generation products to market
• Better after-sale service capability
• Skills in manufacturing a high quality product
• Capability to fill customer orders accurately and swiftly

Question 9

What is a threshold capability?

Answer 9

to be able to compete in a market. Qualifying to compete with competitors today.

Question 10

What is a distinctive capability?

Answer 10

required to achieve competitive advantage

(difficult to immitate). Win today

Question 11

what are learning effects?

Answer 11

• Source of competitive advantage.
  Can lead to cost savings, quality improvements and greater reliability

(a) Employee Learning - Task repetition increases labour productivity
(b) Product Redesign - Redesigned and reduced number of components, and increased reliability
(c) Process Improvement - Lower wastage changing work flow and equipment design

Question 12

Sustainable competitive advantage are?

Answer 12

Valuable - do capabilities exist that are valued by custimers and enable the organisation to respond to enviromental opportunities or threats?

Rare - Do capabilities exist that no (or few) competitors possess?

inmitability - are capabilities difficult and costly for competitirs to obtain and imitate?

Organisation support - is the organisation appropriately organised to exploit the capabilities?

Question 13

What are the different types of capabilites an organisation can possess?

Answer 13

Valuable (No), supported by organisation (NO) = competitive disadvantage

Valuable (yes), Rare (no), = competitive parity

Values (yes), rare (yes) inmitatable (no), = Temporary competitive advantage

Valuable (yes), Rare (yes), inimitatable (yes) supported by organisation (yes) = sustainable competitive advatntage.

Question 14

What is the value chain?

Answer 14

The value chain - describes the categories of activities within an organisation which, together, create a product or service.
- Competitive advantage can be analysed in any of these activities.

Question 15

Give examples of value chains primary and support activities.

Answer 15

Primary activities: inbound logistics, operations, outbound logistics, marketing and sales, service

Support activities: firm infrastructure, Human resouce management, technological development, procurement.

Question 16

What are some of the uses of a value chain?

Answer 16

• A generic description of activities – understanding how activities create value
• Identifying activities where the organisation has particular strengths or weaknesses.
• Analysing the competitive position of the organisation using the VRIO criteria
• Looking for ways to enhance value or decrease cost in value activities

Question 17

Explain some of the uses of the value system

Answer 17

• Understanding cost/price structures across the value system
• Identifying ‘profit pools’ (i.e. The levels of profit in different parts of the system)
• The ‘make or buy’ decision – ‘in-house’ or outsource.
• Partnering – deciding who to work with

Question 18

What are some of the dangers of SWOT?

Answer 18

• Long lists with no attempt at prioritisation.
• Over generalisation SWOT is used as a substitute for analysis
• SWOT is not used to guide strategy

Question 19

TOWS Matrix

Answer 19

Strength+Opportunity = using strength to take advantage of opporunity

Opportunity + Weaknesses = using opportunites by minimising threats

Strength + threat = Using strength to minimise threats

Weakness + Threats = Minimising weaknesses and avoiding threats.

Question 20

what is casual ambiguity?

Answer 20

when it is hard for others to see how an organisation gains its competitive advantage.

Question 21

How do the dynamic capabilites relate to strategic model?

Answer 21

sensing opportunities = strategic positon.
Seizing opportunities = making strategic choices.
Reconfiguration = strategic in action.

Question 22

What do strategic capabilites include?

Answer 22

Strategic capabilities include both operational capabilities and dynamic capabilities that can change operational capabilities in case the environment changes.

Question 23

what is an exploration/ exploitation trade off?

Answer 23

is the trade-off between operational capabilities and dynamic capabilities – makes it difficult to achieve optimal balance

Question 24

which capabiltiy achieves competitve advantage?

Answer 24

Threshold = DOES NOT
Distinctive = DOES

Question 25

How do competitive competences remain unique?

Answer 25

Remain unique because they comprise a bundle of constituent skills and technologies rather than a single, discrete skill or technology.

Question 26

Give examples of inimitabale of strategic capabilities

Answer 26

1) Complexity – complex and involves linkages •Internal linkage (activities + process = customer value) •External linkage (co-specialisation – developing activities with customers or partners) 2)Casual ambiguity – customers cannot pin-point competitive advantage. •Characteristic ambiguity (tacit knowledge) •Linkage ambiguity – competitors cannot locate which activities and processes are dependent on which others to form linkages that create distinctive competences. 3) Culture and history – (complex social interactions and interpersonal relationships) •Path dependency (origins and history by which competency have developed overtime) •Taken-for-granted activities.

Question 27

What is tacit knowledge?

Answer 27

Tacit knowledge – more personal, hard to formalise and communicate eg: could be the knowledge of a highly experienced sales force or the experience of a top management team in making many successful acquisition • Difficult to imitate ( distinctive to organisation) • Knowledge developed for years through “communities of practice”

Question 28

what is explicit knowledge?

Answer 28

Explicit (objective) knowledge – is transmitted in formal systematic ways – can take the form of a codified information resource such as a system manual or files of market research and intelligence.

Question 29

what is benchmarking?

Answer 29

used to show how one organisation can be compared to other

Question 30

Limitations to benchmarking?

Answer 30

- Surface comparisons - not identification of performance. | - Achieves competitive parity

Question 31

what are profit pools?

Answer 31

refer to the different levels of profit available at different parts of the value system.

Question 32

what frameworks can be used to diagnose organisational capabilities?

Answer 32

- VIRO analysis - Benchmarking - Analysing value chain and value system. - Activity mapping - SWOT analysis

Question 33

How can managers develop strategic capabilities?

Answer 33

1) Internal capability development - Building and recombining capabilities - Leveraging capabilities – - Stretching capabilities- 2) External capability development eg: developing new capabilities by acquisition or alliance and joint venture. 3) Ceasing activities – focusing on value-adding activities and eliminate activities on areas of cost. 4) Monitor outputs and benefits when it is not possible to fully understand capabilities. 5) Awareness development –

Question 34

Activity systems map emphasises the importance of different activities that create value to customers - Give two implications of this:

Answer 34

- The danger of piecemeal change with such systems which may damage the positive benefits of the linkage that exist. - Challenge of mapping change – change to one part of the system will affect another.

Question 35

What are the benefits of value chain mapping?

Answer 35

- Relationship to VIRO - The importance of linkage and fit - Relationship to value chain

Question 36

what are the disadvantages to value chain mapping?

Answer 36

- Disaggregation – managers may identify capabilities at too abstract a level. - Superfluous activities – activities that can be eliminated or outsourced to reduce costs (where other companies many have this.