5-10 Page Executive Summary (ESSAY) on Lecture Slides
JohnWick321
Chapter4.pptxChapter 4 Learning Objectives
Define the four characteristics of resources that lead to sustained competitive advantage as articulated by the resource-based theory of the firm
Understand the difference between resources and capabilities
Understand how intellectual property can be a valuable resource for firms
Know the 4 Ps of marketing
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Learning Objectives
Define the primary activities of the value chain
Be able to discuss other theories about firm success and failure beyond resource-based theory
Learn how SWOT analysis can help organizations and individuals, and its limitations
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Resource-based Theory
Contends that the possession of strategic resources provides an organization with a golden opportunity to develop competitive advantages over its rivals
A strategic resource is:
Valuable
Rare
Difficult to imitate
Nonsubstitutable
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Resource-based Theory
Sustained competitive advantage: A competitive advantage that will endure over time
Tangible resources: Resources than can be readily seen, touched, and quantified such as physical assets, property, plant, equipment and cash
Intangible resources: Resources that are difficult to see, touch, or quantify such as the knowledge and skills of employees, a firm’s reputation, and a firm’s culture
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Resource-based Theory
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Resource-based Theory
Capabilities: What an organization can do based on the resources it possesses
Dynamic capability: Unique ability to create new capabilities by continually updating a firm’s array of capabilities in order to keep pace with changes in its environment
Distinctive competence: A set of activities that an organization performs especially well
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http://www.youtube.com/watch?v=BoYbxXGAdC4
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Paperscape Exercise
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4 Ps of Marketing
Marketing mix: Consists of the four Ps (Product, Price, Place, Promotion) that firms use to offer customers a coherent and persuasive message
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Leveraging resources and capabilities to create desirable products and services is important, but customers must still be convinced to purchase these goods and services. The marketing mix—also known as the four Ps of marketing—provides important insights into how to make this happen.
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4 Ps of Marketing
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4 Ps of Marketing
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Intellectual Property
Intellectual property refers to creations of the mind such as inventions, artistic products, and symbols. Four types include:
Patents
Trademarks
Copyrights
Trade secrets
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Patents
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Patents
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Trademarks
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Trademarks
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Trade Secrets
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Trade Secrets
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Copyrights
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Copyrights
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http://www.ted.com/talks/rob_reid_the_8_billion_ipod.html
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Value Chain
Primary activities: Actions that are directly involved in the creation and distribution of goods and services
Inbound logistics (arrival of new material)
Operations (production process)
Marketing and Sales (attracting potential customers)
Service (provide assistance to customers)
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Value Chain
Secondary activities: Not directly involved in the evolution of a product, but instead provide important underlying support for primary activities
Firm infrastructure (how the firm is organized and led by executives)
Human resources management (recruitment, training, and compensation of employees
Technology (use of computerization and telecommunications to support primary activities)
Procurement (negotiating for and purchasing raw materials)
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The Value Chain
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Supply Chain
Supply chain: System of people, activities, information, and resources involved in creating a product and moving it to the customer
A broader concept than a value chain
Captures the entire process of creating and distributing a product, often across several firms
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Supply Chain
Best value supply chains: Focuses on the total value added to the customer
Four components of a best value supply chain include:
Strategic supply chain management: Create competitive advantages and enhance firm performance; strives to excel along four measures: Speed, Quality, Cost, and Flexibility
Agility: Ability to act rapidly in response to dramatic changes in supply and demand
Adaptability: Willingness and capacity to reshape supply chains when necessary
Alignment: Creating consistency in the interests of all participants in a supply chain
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Other Views on Firm Performance
Enactment: Contends that an organization can, at least in part, create an environment for itself that is beneficial to the organization by putting strategies in place that reshape competitive conditions in a favorable way
Environmental determinism: Contends that organizations are very limited in their ability to adapt to the conditions around them
Institutional theory: Examines the extent to which firms copy each other’s strategies
Transaction cost economics: Centers on whether it is cheaper for a firm to make or to buy the products that it needs
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SWOT Analysis
A technique for understanding a firm’s strengths and weaknesses along with the opportunities and threats that exist in the firm’s environment
Takes a narrower focus by centering on an individual firm
Used to compare internal and external factors in order to generate ideas about how their firm might become more successful
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SWOT Analysis
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SWOT Analysis
It is wise to focus on ideas that allow a firm to:
Leverage its strengths
Steer clear of or resolve its weaknesses
Capitalize on opportunities
Protect itself against threats
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SWOT Analysis Exercise
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Chapter 4: Key Takeaways
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Resource-based theory argues that firms will perform better when they assemble resources that are valuable, rare, difficult to imitate, and nonsubstitutable.
Different forms of intellectual property often serve as strategic resources for firms.
Examining a firm’s resources can be aided by the value chain, a tool that systematically examines primary and secondary activities in the creation of a good or service, and by a knowledge of supply chain management that examines the value added of multiple firms working together.
While resource-based theory provides a dominant view for examining the determinants of firm success, other perspectives provide insight for understanding specific behaviors of firms within an industry.
SWOT analysis is a simple but powerful technique for examining the interactions between factors internal and external to the firm.
