Resources and Capabilities

Resources and Capabilities

Page 1

Competitive Advantage: An Internal View • 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? –Decisions –Actions and maneuvers –Force, endurance

Page 2

Resources and Capabilities

Page 3

The Cola Wars – Coke vs. Pepsi

Page 4

Resources • Inputs into a firm’s value-producing stream • What a firm has • Capital equipment • • • •

Skills of employees Brand names Deep pockets Strategic alliances

Page 5

Capabilities • The ability to integrate resources to achieve a desired objective • What a firm can do • Quick introduction of new products • Preemptive price-cutting • Attention-grabbing advertising

Page 6

Boxing Resources Boxer 1

Boxer 2

• 6’6” tall

• 5’10” tall

• 233 lbs

• 175 lbs.

• Runs 24 mi./week

• Practices yoga

• Eats 240g protein/day

• Likes to eat pasta and salad

• Has 20/20 vision

• Has 20/100 vision, must wear contacts

• Quick reflexes • Fought in 3 championship fights • Coached by Cuban national team coach

• Just learned how to box • Prefers to coach himself

Page 7

Boxing Capabilities Boxer 1

Boxer 2

• Longer punching reach

• ?? • ??

• Punches with great force, speed and power • Endurance to compete aggressively for 10-round match

• Able to quickly move away from fierce attacks • Able to quickly see and interpret rival’s hand, feet, and eye movements

• Able to blend own and coach’s experience for superior strategy and tactics

Page 8

Value Chain Analysis To identify which resources and capabilities can add value

Support Activities

Primary Activities

Page 9

Inbound Logistics

Support Activities

Primary Activities

Page 10

Operations

Inbound Logistics

Support Activities

Primary Activities

Page 11

Outbound Logistics

Operations

Inbound Logistics

Support Activities

Primary Activities Page 12

Primary Activities

Marketing & Sales

Outbound Logistics

Operations

Inbound Logistics

Support Activities

Page 13

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Inbound Logistics

Support Activities

Page 14

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Inbound Logistics

Support Activities

Procurement

Page 15

Technological Development

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Procurement

Inbound Logistics

Support Activities

Page 16

Technological Development

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Procurement

Inbound Logistics

Support Activities

Human Resource Management

Page 17

HQ: TMT & Firm Infrastructure

Technological Development

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Procurement

Inbound Logistics

Support Activities

Human Resource Management

Page 18

HQ: TMT & Firm Infrastructure

Technological Development

Primary Activities

Service

Marketing & Sales

Outbound Logistics

Operations

Procurement

Inbound Logistics

Support Activities

Human Resource Management

Page 19

Burger Joint Value Chain Strengths and Weaknesses H.Q. R&D Purch HRM IBL

MFG

OBL

MKT

SVC