Term
| Resource Model of Above-Average Returns |
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Definition
Capabilities evolve and must be managed dynamically in pursuit of above-average returns.
Firms acquired different resources and develop unique capabilities. These resources may not be mobile across firms and the differences in resources are the basis of competitive advantage |
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Term
Resource-Based Model - Step 1
Resources |
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Definition
Identify firm resources
Study strengths and weaknesses relative to rivals |
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Term
Resource-Based Model - Step 2
Capability |
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Definition
| Determine what firm capabilities allow it to do better than rivals |
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Term
Resource-Based Model - Step 3
Competitive Advantage |
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Definition
| Determine how firm's resources and capabilities may create competitive advantage to outperform its rivals |
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Term
Resource-Based Model - Step 4
Attractive Industry |
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Definition
| Locate an attractive industry with opportunities that can be exploited by firm's resources and capabilities |
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Term
Resource-Based Model - Step 5
Strategy Formulation and Implementation |
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Definition
| Select strategy that best exploits resources and capabilities relative to opportunities in environments to earn above-average returns |
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Term
Resource-Based Model - Step 6
Superior Returns
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Definition
| Maintain selected strategy in order to outperform industry rivals and earn above-average returns |
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Term
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Definition
Resources are inputs into a firm's productions process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers
Intangible or Tangible |
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Term
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Definition
| A capability is the capacity for a set of resources to perform a task or an activity in an integrative manner |
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Term
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Definition
| Core competencies are resources and capabilities that service as a source of sustained competitive advantage for a firm over its rivals |
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Term
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Definition
| A global mind set is the ability to study an internal environment in ways that are not dependent on the assumption of a single country, culture or context. |
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Term
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Definition
| Value is measured by a product's performance characteristics and it's attributes for which clients are willing to pay |
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Term
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Definition
Financial
Organizational
Physical
Technological |
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Term
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Definition
borrowing capacity
ability to generate internal funds |
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Term
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Definition
| Firm's formal reporting structure and its formal planning, controlling and coordinating systems |
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Term
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Definition
Sophistication and location of a firm's plant and equipment
Access to raw materials |
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Term
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Definition
| Stock of technology, such as patents, trademarks, copyrights, and trade secrets |
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Term
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Definition
Human
Innovation
Reputational |
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Definition
knowledge
trust
managerial capabilities
organizational routines |
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Definition
Ideas
Scientific capabilities
Capacity to innovate |
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Definition
Reputation with customers
Brand name
Perceptions of product, quality, durability & reliability
Reputation with suppliers
Efficient, effective, supportive, and mutually beneficial interactions and relationships |
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Term
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Definition
| Valuable capabilities help a firm to generate revenues by exploiting opportunities and / or reduce costs by neutralizing threats |
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Term
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Definition
| Rare capabilities are possessed by a few firms in a group of competitors |
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Term
Core Competency
Costly to Imitate |
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Definition
Capabilities than an firm's closest competitors have tried to duplicate or substitute for, but the cost exceeds the benefits.
Three reasons: historical, ambiguous, social complexity |
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Term
Core Competency
Organized to be Exploited |
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Definition
Firm is organized appropriately to obtain full benefits of the resources in order to realize a competitive advantage.
Appropriate structure, control systems and reward systems in place to support capabilities |
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Term
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Definition
| This allows the firm to understand the parts of its operations that create value and those that do not. A firm earns above-average returns only when the value it creates is greater than the costs incurred to create the value |
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Term
| Value Chain - Primary Activities |
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Definition
| Primary activities are involved with a product's physical creation, its sale and distribution to buyers, and its service after the sale. |
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Term
| Value Chain - Support Activities |
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Definition
| Support activities provide the assistance necessary for the primary activities to take place |
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Term
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Definition
- Inbound Logistics
- Operations
- Outbound Logisitics
- Marketing and Sales
- Service
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Term
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Definition
- Procurement
- Technology Development
- Human Resource Mgmt
- Firm Infrastructure
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Term
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Definition
Outsourcing is the purchase of a value-creating activity from an external supplier who can perform these functions more efficiently
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Term
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Definition
They are former core competencies that continue to be emphasized when it is no longer competitively relevant, then it becomes a weakness or core rigidity - and a seed of organizational inertia.
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Term
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Definition
| Changes in the external environment do not cause core competencies into core rigidities, rather, strategic myopia and inflexibility on the part of the managers are the cause |
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Term
| Inbound Logisitics - Primary |
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Definition
| Materials handling, warehousing, and inventory control used to receive, store and disseminate inputs to a product |
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Term
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Definition
Activities necessary to convert the inputs provided by inbound logistics into final product form.
Machining, packaging, assembly, and equip maintenance |
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Term
| Outbound Logisitics - Primary |
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Definition
| Activities involved with collecting, storing and physically distributing the final product to the consumer. |
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Term
| Marketing and Sales - Primary |
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Definition
| To effectively market and sell products firms develop advertising and promotional campaigns, select appropriate distribution channels and select, develop, and support their sales force |
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Term
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Definition
| Activities designed to enhance or maintain a product's value. Firms engage in a range of service-related activities, including installation, repair, training, and adjustment |
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Term
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Definition
| Activities completed to purchase the inputs needed to produce the firm's products, including items fully consumed during the manufacturing process, raw materials, fixed assets etc |
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Term
| Technological Development - Support |
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Definition
Activities completed to improve a firm's product and the process used to manufacture it.
Takes many forms, such as process equipment, basic research and product design, and servicing procedures |
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Term
| Human Resource Mgmt - Support |
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Definition
| Activities involved with recruiting, hiring, training, developing, and compensating all personnel |
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Term
| Firm Infrastructure - Support |
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Definition
| Firm infrastructure includes activities as general mgmt, planning, finance, acctg, legal, and govt relations that are required to support the work of the entire value chain. Through its infrastructure, the firm tries to effectively and consistently identify external opportunities and threats, identify resources and capabilities and support core competencies. |
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