Week 7 - Internal Analysis and RBV

What are resources?

what the firm has (tangible and non-tangible)

What are capabilities?

what the firm can do

Resources are inputs such as…

capital equipment, brand names, patents, finance, skills of individual employees

2 key assumptions

1. resource heterogeneity

2. resource immobility

What is resource heterogeneity?

resources and capabilities differ across firmsWh

What is resource immobility?

resources tend to be ‘sticky’ and do not move easily, capabilities are path dependent and hard to change

Categories of resources

organisational and social, financial, physical, human

Categories of resources

What is organisational and social capital?

structure, planning, controlling and coordinating systems and intra-organisational relationships

Categories of resources

What is financial capital?

equity, loans, retained earnings

Categories of resources

What is human capital?

training, expertise, judgment, intelligence, relationships and insight of individual managers and workers

Resource and Capability and Competitive Advantage

What is relevance?

must be relevant to the key success factors in the market

Resource and Capability and Competitive Advantage

What is scarcity?

if it is widely available, it may be essential to possess it in order to compete but will not be a sufficient basis for competitive advantage

What are 4 parts of resource appraisal framework?

superfluous strengths, zone of irrelevance, key strengths, key weaknesses

3 stages of appraising resources and capabilities

1. identify the key resources

2. appraising R&C (assessing importance and relative strengths)

3. developing strategic implications (exploiting key strengths and managing key implications)