The Internal

The internal environment: * Strategic competitiveness and above – Average returns result when Internal organization (What a firm can do : function of resources, capabilities, and core competencies) matches External environment ( What a firm might do : function of opportunities in the firm’s external environment → Competitive Advantage * Competitive advantage key points: * No competitive advantage lasts forever. * Over time, rival use their own unique resources, capabilities, and core competencies to duplicate the focal firm’s ability to create value for customers. * With globalization, sustainable competitive advantage is especially challenging. * Firms must exploit their current advantages while simultaneously using their resources and capabilities to form new advantages that can lead to future success. * Innovation and people are critical resources for organization in their quest for competitive advantage. * Analyzing the internal organization * the context of internal analysis: Figure 3.1 Component of an internal analysis * Creating value: By innovatively bundling and leveraging their resources and capabilities by exploiting their core competencies or competitive advantages, firms creative value.
Value is measured by: Product performance characteristics, Product attributes for which customers are…
Above-average returns * Resources, Capabilities and Core competencies * Four specific criteria of sustainable competitive advantage capabilities that are : valuable, rare, Costly-to-imitate, Nonsubstitutable capabilities * Competitive consequences: focus on capabilities that yield competitive parity and either temporary or sustainable competitive advantage. * Performance implications include: * Parity = average returns * Temporary advantage = avg.to above avg.returns. * Sustainable advantage = above average returns * Value Chain Analysis:

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