Chapter 5 notes
Chapter 5: Internal Scanning: Organizational Analysis
5.1 A Resource-Based Approach to Organizational Analysis
Analysts must also look within the corporation itself to identify internal strategic factors—critical strengths and weaknesses that are likely to determine whether a firm will be able to take advantages of opportunities while avoiding threats
Core and Distinctive Competencies
Types of resources
Tangible Assets- plant, equipment, finances, and location
Human Assets- number of employees, their skills, and motivation
Intangible Assets- a company’s ability to exploit its resources
Dynamic capabilities: capabilities that are constantly being changes and reconfigured to make them more adaptive to an uncertain environment
Core rigidity or deficiency: a strength that over time matures and may become a weakness
VRIO framework
1. Value: Does it provide customer value and competitive advantage?
2. Rareness: Do no other companies possess it?
3. Imitability: IS it costly for others to imitate?
4. Organization: Is the firm organized to exploit the resource
Evaluating a company
1. Company’s past performance
2. The company’s key competitors
3. The industry as a whole
Using Resources to Fain Competitive Advantage Grant’s five-step strategic analysis:
1. Identify and classify the firm’s weaknesses and strengths
2. Combine the firm’s strengths into specific capabilities and competencies
3. Appraise capabilities and competencies in terms of sustainable competitive advantage
4. Select the strategy that best utilizes the competencies and capabilities
5. Identify resource gaps and invest in upgrading weaknesses
Determining the Sustainability of an Advantage
Two characteristics determine the sustainability of a firm’s distinctive competency: durability and imitability.
Continuum of Resource Sustainability:
5.2 Business Models
Five elements of a business model:
1. Who it serves
2. What it provides
3. How it
5.1 A Resource-Based Approach to Organizational Analysis
Analysts must also look within the corporation itself to identify internal strategic factors—critical strengths and weaknesses that are likely to determine whether a firm will be able to take advantages of opportunities while avoiding threats
Core and Distinctive Competencies
Types of resources
Tangible Assets- plant, equipment, finances, and location
Human Assets- number of employees, their skills, and motivation
Intangible Assets- a company’s ability to exploit its resources
Dynamic capabilities: capabilities that are constantly being changes and reconfigured to make them more adaptive to an uncertain environment
Core rigidity or deficiency: a strength that over time matures and may become a weakness
VRIO framework
1. Value: Does it provide customer value and competitive advantage?
2. Rareness: Do no other companies possess it?
3. Imitability: IS it costly for others to imitate?
4. Organization: Is the firm organized to exploit the resource
Evaluating a company
1. Company’s past performance
2. The company’s key competitors
3. The industry as a whole
Using Resources to Fain Competitive Advantage Grant’s five-step strategic analysis:
1. Identify and classify the firm’s weaknesses and strengths
2. Combine the firm’s strengths into specific capabilities and competencies
3. Appraise capabilities and competencies in terms of sustainable competitive advantage
4. Select the strategy that best utilizes the competencies and capabilities
5. Identify resource gaps and invest in upgrading weaknesses
Determining the Sustainability of an Advantage
Two characteristics determine the sustainability of a firm’s distinctive competency: durability and imitability.
Continuum of Resource Sustainability:
5.2 Business Models
Five elements of a business model:
1. Who it serves
2. What it provides
3. How it