Chapter 4 | Strategic Management
direct imitation
1st avenue of imitation. direct imitation is a way to copy or imitate a valuable and rare resource, when firms have difficulty protecting their advantage.
substitution
2nd avenue of imitation for a firm's valuable and rare resource is through substitution.
SWOT analysis
SWOT analysis is 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.
activities
activities are distinct and fine-grained business processes that anable firms to add incremental value by transforming inputs into goods and services
capabilities
capabilities are organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically.
path dependence
path dependence is a situation in which the options one faces in the current situation are limited by decisions made in the past.
rare resource
rare resource is one of the four key criteria in the VRIO framework. A resource is rare if the number of firms it would require to reach a state of perfect competition.
resource flows
resource flows the firm's level of investment to maintain or build a resource.
resource heterogeneity
resource heterogeneity are assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms.
resource immobility
resource immobility are 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
combining imitation and substitution
samsung imitation game
support activities
support activities are a firm activities that add value indirectly, but are necessary to sustain primary activities.
tangible resources
tangible resources are resources that have physical attributes and thus are visible.
VRIO framework
Valuable Rare Icostly to Imitate Organized to capture the value of the resource
causal ambiguity
causal ambiguity is a situation in which the cause and effec of a phenomenon are not readily apparent.
core competencies
core competencies are unique strenths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage.
core rigidity
core rigidity is a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed.
costly to imitate resource
costly to imitate resource is 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.
dynamic capabilities
dynamic capabilities is a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage.
dynamic capabilities perspective
dynamic capabilities perspective is 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.
intangible resources
intangible resources are resources that do not have physical attributes and thus are invisible.
intellectual property (ip) protection
intellectual property (ip) protection is a critical intangible resource that can provide a strong isolating mechanism, and thus help to sustain a competitive advantage.
isolating mechanisms
isolating mechanisms are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy.
organized to capture value
organized to capture value is 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, an competencies.
primary activities
primary activities are the 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.
resource stocks
resource stocks is the firm's current level of intangible resources.
resource-based view
resource-based view is a model that sees certain types of resources as key to superior firm performance
resources
resources are any assets that a firm can draw on when formulating and implementing a strategy.
social complexity
social complexity is a situation in which different social and business systems interact with one another.
value chain
value chain is the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value.
valuable resource
valuable resource is one of the 4 key criteria in the VRIO framework. A resource is valuable if it helps a firm exploit an external opportunity or offset an external threat.