ch.05 internal
TRANSCRIPT
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InternalEnvironment:Resources &
Capabilities
Ch. 5
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From External to Internal
THEINDUSTRYENIR!N"ENT
• Competitors
• Customers
• Suppliers
STR#TE$Y
The
Environment-Strategy Interface
THE FIR"
•$oals an%alues
•Resources an%
Capabilities
•Structure an%Sstems
The Firm-Strategy
Interface
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• Functional #nalsis 'HIF!R"S(
• )es to Core Competenc 'RIN(
• #spects o* Inimitabilit 'CUTTS(
Internal Elements
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• Divi%e +rm up into %i,erent elements
• #ssess aspects o* eac-
•
Determine level o* stren.t- or/ea0ness
• Searc- *or elements o* corecompetencies
Internal #nalsis
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FIR" INFR#STRUCTURE
HU"#N RES!URCE "#N#$E"ENT
TECHN!1!$Y DEE1!2"ENT
2R!CURE"ENT
IN3!UND !2ER#TI!NS !UT3!UND "#R)ETIN$SERICE
1!$ISTICS 1!$ISTICS & S#1ESPRIMARY
ACTIVITIES
SUPPORT
ACTIVITIES
2orter4s alue C-ain
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• Human Resources – Trainin.5 motivation an% compensation
o* t-e /or0*orce
– 3ot- sstems an% personnel
– General Electric, Pepsico
Functional #nalsis'HIF!R"S(
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• In*rastructure & In*ormation Sstems – Compan context in /-ic- ot-er
activities occur
• Structure5 control sstems5 culture5lea%ers-ip
– Electronic sstems *or trac0in. +rm
activities – Walmart, Cisco
• Finance –
"onetar resources5 %ebt levels5 &ro+tabilit
Functional #nalsis'HIF!R"S(
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• !perations – Creation o* core .oo% or service
.eneratin. value *or t-e +rm
– Inboun%5 trans*ormation5 outboun%
– !PS, Fo"r Seasons #otels, Singapore $irlines
Functional #nalsis'HIF!R"S(
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• Researc- an% Development – Desi.n o* pro%ucts an% processes
– Resultin. in eit-er .oo%s5 service or
%eliver mec-anisms
– Merc%, $pple, &M, Canon
Functional #nalsis'HIF!R"S(
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• "ar0etin. & Sales – 3ran% positionin.5 a%vertisin.5 pricin.
tactics & sales *orce
– Proctor ' Gamle, P()er
• Service – #*ter sales support5 /arrant &
relations-ip maintenance – Caterpillar
Functional #nalsis'HIF!R"S(
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• De+ne% – Firm6speci+c stren.t-s t-at allo/ a +rm
to .ain competitive a%vanta.e
• T-rou.- %i,erentiation or lo/er costs
– #rise *rom resources an% capabilities
• "a relate to value c-ain *unctions or
to elements /it-in t-em• S-oul% speci+call an% precisel
i%enti* t-ese
Core Competencies
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R e s o u r c e s R e s o u r c e s
CoreCompetencies
Capabilities
•
S0ills at coor%inatin.resources an% puttin. t-emto pro%uctive use
• Uni7ue stren.t-s allo/in.+rm to create superior value
• Tan.ible 'lan%5 e7uipment(or intan.ible 'reputation5patents5 0no/ -o/( assets
o* t-e +rm
Resources an% Capabilities
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• Resources & Capabilities must be: – aluable
– Rare
– Inimitable
– Nonsubstitutable
• You can /in /it- RIN
RIN: )e to CoreCompetenc
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• aluable – Is a relevant )e Success Factor
– 1o/ers cost5 increases %i,erentiation
• Rare – Scarcit: *e/ ot-er companies -ave
t-em
– Example: all +rms -ave /or0ers &bran%s 8 /-at is uni7ue about ours9
RIN: )e to CoreCompetenc
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• Inimitable – Dicult to trans*er *rom one +rm to
anot-er
• Not available on t-e open mar0et
• I* so5 re7uires special s0ill or sstem
– Dicult *or +rm itsel* to cop or replicate
it
RIN: )e to CoreCompetenc
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• Causal #mbi.uit – Dicult to %iscern reasons *or a +rm4s
success
– !*ten t-e pro%uct o* man little%ecisions
• Uni7ue Histor
– Con%itions -appenin. to one +rm but notanot-er
– 2at- %epen%enc: a%vanta.e %epen%s ont-e se7uence ta0en to ac-ieve it
CUTTS: 3arriers to Imitation
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• Tacitness – Source o* a%vanta.e %icult to
articulate
– 1earnin. b %oin. a *actor
• Time Compression Diseconomies – Ta0es as lon. to imitate as it %oes to
%evelop – 2rovi%es lea% time: %evelop ne/
stren.t-s /-ile ot-ers catc- up
CUTTS: 3arriers to Imitation
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• Social Complexit – 3ase% on t-e interactions o* man
people5 units an% tec-nolo.ies
– Is inte.rate% an% irre%ucible• 2arts /or0 to.et-er to ac-ieve an
uni+e% result
•
#ll parts are nee%e% to attain t-atresult
CUTTS: 3arriers to Imitation
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• From easiest to most %icult toImitate – Tan.ible Resources
• Fe/ CUTTS barriers
– Intan.ible Resources
• "a be -ave several CUTTS barriers
– Capabilities• Easil can -ave all CUTTS barriers
CUTTS: 3arriers to Imitation
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• Nonsubstitutable – Can4t be replace% b an entirel %i,erent
tpe o* resource or tec-nolo.
• ;-at bene+ts %oes resource orcapabilit provi%e9
• ;-at else can provi%e t-ese same
bene+ts9 – Substitution more li0el in %namic
in%ustries
• "ore %icult to sustain an a%vanta.e
RIN: )e to CoreCompetenc
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• !nl – Has pai% price o* a%mission but no real
a%vanta.e
• R !nl – No one else -as it5 but /-o /ants it9
• & R !nl – #%vanta.e real but onl temporar
• & I !nl – Unli0el: inimitabilit assumes rarit
RIN: )e to CoreCompetenc
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• 5 R & I !nl – #%vanta.e lasts pen%in. some ma
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• #ssume Stren.t-s in > > > – "ar0etin.: stron. bran% name
– R&D: ne/ pro%uct %esi.n capabilities
– !perations: use o* a%vance% in%ustrialrobotics
• 2roce%ure – See -o/ *ar eac- one .oes %o/n t-e
RIN=CUTTS list
RIN: $eneric Example
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• aluable9 – Stron. 3ran% lo/ers customer
ac7uisition costs
– Stron. R&D permits -i.- prices *orinnovative an% cuttin.6e%.e pro%ucts
– Stron. !perations provi%es -i.- 7ualit
at lo/er costs
RIN: $eneric Example
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• Rare9 – Stron. 3ran% is not rare: ot-er
competitors -ave compellin. bran%s
/it- similar traits – Stron. R&D uncommon in t-e in%ustr?
+rm is an obvious lea%er
–
#%vance% robotics still unusual in t-ein%ustr? +rm -as purc-ase% latesttec-nolo.
RIN: $eneric Example
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• Inimitable9 – "ar0etin.: not consi%ere% since it /asn4t
rare
• Use CUTTS *or t-e ot-er t/o – R&D: social complexit an% uni7ue
-istor relatin. to creative culture
–!perations: imitable since ot-er +rmscan purc-ase e7uipment & use itmo%ularl
RIN: $eneric Example
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• Substitutable9 – !perations: not consi%ere% since it /as
inimitable
– R&D: provi%es uni7ue an% cuttin. e%.etec-nolo.5 not to mention t-e @cool*actorA
•
No substitutes *or lea%in. e%.e*eatures
• Cool *actor coul% be substitute%t-rou.- innovative mar0etin.
RIN: $eneric Example
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• Core Competenc9 – R&D: mostl +ts t-e bill
– !perations: more so t-an mar0etin.5
t-ou.- a%vanta.e is temporar – "ar0etin.: valuable in%ee%5 but not rare
• Strate. s-oul% @t-ro/ t-e best
punc-A – 1evera.e uni7ue stren.t- in R&D
RIN: $eneric Example