Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies

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intellectual property (ip) protection

a critical intangible resource that can provide a strong isolating mechanism, and thus help to sustain a competitive advantage

dynamic capabilities

a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage

core rigidity

a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed

swot analysis

a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses ( s and w) with those from an analysis of external opportunities and threats ( o and t) to derive strategic implications

dynamic capabilities perspective

a model that emphasizes a firm;s ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment

resource- based view

a model that sees certain types of resources as key to superior firm performance

social complexity

a situation in which different social and business systems interact with one another

casual ambiguity

a situation in which the cause and effect of a phenomenon are not readily apparent

path dependence

a situation in which the options one faces in the current situation are limited by decisions made in the past

vrio framework

a theoretical framework that explains and predicts firm- level competitive advantage

resources

any assets that a firm can draw on when formulating and implementing a strategy

resource immobility

assumption in the resource- based view that a firm has resources that tend to be "sticky' and that do not move easily from firm to firm

resource heterogeneity

assumption in the resource- based view that a firm is a bundle of resources and capabilities that differ across firms

isolating mechanisms

barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy

activities

distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into good and services

primary activities

firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain

support activities

firm activities that add value indirectly, but are necessary to sustain primary activities

costly- to- imitate resource

one of the four key criteria in the vrio framework. a resource is costly to imitate if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost

rare resource

one of the four key criteria in the vrio framework. a resource is rare of the number of firms that possess it is less than the of firms it would require to reach a state of perfect competition

valuable resource

one of the four key criteria in the vrio framework. a resource is valuable if it helps a firm exploit an external opportunity or offset an external threat

organized to capture value

one of the four key criteria in the vrio framework. the characteristic of having in place an effective organizational structure, processes and systems to fully exploit the competitive potential of the firm's resources, capabilities, and competencies

capabilities

organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically

intangible resources

resources that do not have physical attributes and thus are invisible

tangible resources

resources that have physical attributes and thus are visible

resource stocks

the firm's current level of intangible resources

resource flows

the firm's level of investments to maintain or build a resource

value chain

the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value

core competencies

unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage


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