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Internal Analysis: Resources, Capabilities and Core Competencies

Internal Analysis: Resources, Capabilities and Core Competencies. What is a resource? What is a capability? What’s the difference: Potential vs. Kinetic energy? How do resources and/or capabilities contribute to competitive advantage?. Key Questions. What a firm Has . Resources.

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Internal Analysis: Resources, Capabilities and Core Competencies

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  1. Internal Analysis: Resources, Capabilities and Core Competencies

  2. What is a resource? What is a capability? What’s the difference: Potential vs. Kinetic energy? How do resources and/or capabilities contribute to competitive advantage? Key Questions

  3. What a firm Has... Resources Resources Resources represent inputs into a firm’s production process... such as capital equipment, skills of employees, brand names, finances and talented managers

  4. Capabilities represent... the firm’s capacity or ability to integrate individual firm resources to achieve a desired objective. What a firm Does... Capabilities

  5. What a firm Does... Core Competencies that is Strategically Valuable Core Competencies must be: Valuable Capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment

  6. What a firm Does... Core Competencies that is Strategically Valuable Core Competencies must be: Valuable Capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment Rare Capabilities that are possessed by few, if any, current or potential competitors

  7. What a firm Does... Core Competencies that is Strategically Valuable Core Competencies must be: Valuable Capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment Rare Capabilities that are possessed by few, if any, current or potential competitors Costly to Imitate Capabilities that other firms cannot develop easily, usually due to unique historical conditions, causal ambiguity or social complexity

  8. What a firm Does... Core Competencies that is Strategically Valuable Core Competencies must be: Valuable Capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment Rare Capabilities that are possessed by few, if any, current or potential competitors Costly to Imitate Capabilities that other firms cannot develop easily, usually due to unique historical conditions, causal ambiguity or social complexity Nonsubstitutable Capabilities that do not have strategic equivalents, such as firm-specific knowledge or trust-based relationships

  9. Value Chain Analysis To identify which resources and capabilities can add value Support Activities Primary Activities

  10. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Inbound Logistics Primary Activities

  11. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Inbound Logistics Operations Primary Activities

  12. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Inbound Logistics Outbound Logistics Operations Primary Activities

  13. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Marketing & Sales Outbound Logistics Inbound Logistics Operations Primary Activities

  14. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Service Inbound Logistics Outbound Logistics Marketing & Sales Operations Primary Activities

  15. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Procurement Service Inbound Logistics Outbound Logistics Marketing & Sales Operations Primary Activities

  16. Value Chain Analysis helps to identify which resources and capabilities can add value Support Activities Technological Development Procurement Service Inbound Logistics Outbound Logistics Marketing & Sales Operations Primary Activities

  17. Value Chain Analysis helps to identify which resources and capabilities can add value Human Resource Management Support Activities Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics Operations Primary Activities

  18. Value Chain Analysis helps to identify which resources and capabilities can add value Firm Infrastructure Human Resource Management Support Activities Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics Operations Primary Activities

  19. Value Chain Analysis helps to identify which resources and capabilities can add value Firm Infrastructure Human Resource Management Support Activities MARGIN Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics MARGIN Operations Primary Activities

  20. What are key sources of competitive advantage for following companies: Honda McDonald’s ESPN Dell Procter & Gamble Steinway Pianos Wal-Mart The Grateful Dead Toyota Examples

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