MG3047 Strategic Management: Resources and Capabilities Flashcards

This set of vocabulary flashcards covers the core concepts of the Resource-Based View (RBV), the VRIO framework, and strategic analysis tools from MG3047 Strategic Management.

Resource-Based View (RBV)

A theoretical framework for understanding how competitive advantage is achieved and sustained over time by exploiting internal strengths while neutralizing external threats and avoiding internal weaknesses.

Resource heterogeneity

An RBV assumption that different organisations possess different bundles of resources, even if they are competing in the same industry.

Resource immobility

An RBV assumption that resource and capability differences among organisations may be long-lasting because it is costly for those without them to develop or acquire them.

Resources

What an organisation has (nouns), including physical assets (machines, buildings), financial assets (cash flow, funds), and human assets (employees, managers).

Capabilities

What an organisation does (verbs), representing the skills and ways an organisation utilizes its resources to achieve goals like efficiency, productivity, and innovation.

Threshold resources and capabilities

The 'qualifiers' needed for an organisation to meet necessary requirements to compete at all in a given market and achieve parity with competitors.

Distinctive resources and capabilities

Resources and capabilities required to achieve competitive advantage because they are of value to customers and difficult for competitors to imitate.

VRIO framework

An internal analysis tool consisting of four questions (Value, Rarity, Inimitability, and Organisation) used to determine the competitive potential of a resource or capability.

Value (VRIO)

Resources and capabilities are considered valuable when they enable the organisation to respond to environmental opportunities or threats and create products/services valued by customers.

Rarity (VRIO)

Resources and capabilities that are possessed uniquely by only one organisation or a very small number of competitors.

Inimitability (VRIO)

Resources and capabilities that competitors find difficult and costly to imitate, obtain, or substitute.

Organisation (VRIO)

The requirement that an organisation's structure, processes, and management control systems are suitably arranged to support and exploit its resources and capabilities.

SO Strategic options

Strategic options generated in the TOWS matrix that use internal strengths to take advantage of external opportunities.

ST Strategic options

Strategic options generated in the TOWS matrix that use internal strengths to avoid external threats.

WO Strategic options

Strategic options generated in the TOWS matrix that take advantage of external opportunities by overcoming internal weaknesses.

WT Strategic options

Strategic options generated in the TOWS matrix that aim to minimise internal weaknesses and avoid external threats.