MAN 301 Lecture 03 & Exercise 03: External & Internal Analysis + Pets Deli

Vocabulary practice flashcards covering external macro and industry analysis (PEST, Five Forces, Strategic Groups), internal firm-level resources and capabilities (RBV, VRIO, Value Chain, Relational View), and the Pets Deli turnaround case study for MAN 301.

Market-Based View (MBV)

A strategic management perspective holding that external industry structure, market opportunities, threats, and competitive pressures primarily shape a firm's strategic choices.

Resource-Based View (RBV)

A strategic management perspective proposing that the heterogeneity and partial immobility of a firm's internal resources and capabilities explain differences in competitive advantage and performance.

Strategic Fit

The alignment between a firm's internal strengths and external environmental opportunities, requiring dynamic adaptation as market conditions evolve.

Macro-Environment

The overarching external landscape consisting of seven components: political/legal/regulatory, economic, social, technological, natural environment, global forces, and demographics.

Porter's Five Forces

An analytical framework evaluating five competitive pressures that dictate industry profit potential: rivalry among existing firms, threat of new entrants, threat of substitutes, supplier power, and buyer power.

Complementors

Industry participants whose offerings enhance the perceived value of each other's products or services (e.g., printers and paper) within the Value Net, enabling mutual cooperation while posing potential future competitive rivalry.

Value Net

A strategic map beyond Five Forces that incorporates complementors alongside competitors, customers, and suppliers to identify opportunities for value creation and cooperation.

Scenario Analysis

A planning technique that outlines alternative future industry states (e.g., best, base, and worst scenarios) and determines required contingency actions rather than relying on a single forecast.

Strategic Group

A cluster of industry rivals with similar business models, market positioning, and competitive approaches across dimensions such as price/quality, product breadth, channels, technology, or service.

Mobility Barriers

Industry-specific impediments and costs that prevent companies from moving across strategic groups within the same industry.

Resources

Productive inputs and assets controlled by a firm, categorized into tangible assets (physical, financial, organizational) and intangible assets (reputation, brands, relationships, culture, technology, human capital).

Capabilities

Organizational skills and proficiencies for coordinating, integrating, and deploying resources, embodied in organizational routines, processes, and structures.

Core Competencies

Distinctive internal capabilities and strengths that are central to a firm's strategy, differentiation, and competitive advantage.

Dynamic Capabilities

A firm's ability to renew, adapt, integrate, and reconfigure its resources and operational skills to respond effectively to shifting external environments (Teece et al., 1997).

VRIO Framework

An internal analysis framework evaluating whether a firm's resource or capability is Valuable ($V$), Rare ($R$), Inimitable ($I$), and Organized ($O$); all four criteria together are necessary to support a sustainable competitive advantage.

Value Chain

A model dividing firm activities into primary activities (inbound logistics, operations, outbound logistics, sales/marketing, service) and support activities (product R&D/technology, procurement, systems, HR, infrastructure) to analyze cost structures and sources of differentiation.

Benchmarking

The process of comparing a firm's weighted competitive strength scores against rivals to identify performance gaps and systematically improve the underlying value-chain activities.

Relational View

A perspective proposing that critical resources and competitive advantages can be embedded in inter-firm partnerships across organizational boundaries rather than solely inside individual firms.

Relational Rents

Supernormal profits jointly created and captured through collaborative exchange and relationship-specific investments between partnered firms.

Strategic Alliances

Voluntary collaborative agreements between independent firms involving shared resources, capabilities, and knowledge to pursue mutual goals such as market access, learning, or risk reduction.

Joint Venture

A formal equity-based alliance governance structure wherein partner firms collaboratively establish and own a newly created, legally independent business entity.

Strategic Networks

Inter-organizational systems analyzed as graphs where firms are nodes and collaborative relationships are ties, characterized by network centrality, structural holes, brokers, and cluster closure.

Customer Value Proposition

The business model component represented by $V - P$ (perceived customer value minus price), reflecting the customer's perceived benefit and willingness to purchase.

Profit Formula

The business model component represented by $P - C$ (price minus per-unit cost), determining whether revenue exceeds total expenses to generate economic profits.

Gross Margin (Pets Deli Margin Stack)

The margin calculated as net revenue ($100$) minus the cost of ingredients, manufacturing, and packaging, resulting in an indexed baseline level of $60$.

Contribution Margin 2 (Pets Deli Margin Stack)

The margin calculated as gross margin ($60$) minus fulfillment, shipping, and delivery packaging costs, leaving an indexed level of $45$.

Contribution Margin 3 (Pets Deli Margin Stack)

The margin calculated as contribution margin 2 ($45$) minus direct customer acquisition and marketing/brand costs, resulting in an indexed level of $25$.

Deliberate Strategy

Proactive, intentional strategic choices planned and executed by leadership, such as Pets Deli's subscription-first focus, personalized dietary advisory, and test-before-scale approach.

Emergent Strategy

Unplanned strategic adjustments and operational adaptations realized in response to environmental shocks, such as Pets Deli's 2022 A/B price tests, supplier diversification, and fulfillment automation.

Ambidextrous Integration

A selective post-merger approach (recommended for Pets Deli with VAFO Group) that consolidates back-end operations (procurement, production, supply chain) for scale synergies while preserving front-end autonomy (brand, customer data, digital advice, agile Berlin team).