COMM1170 Week 1

Resource Based View (RBA) of the Firm

  • Focus on an organisation's internal resources

  • Organisations utilise their internal resources to implement value-creating strategies

  • An organisations resources and capabilities are competitive assets and a source of competitive power in the marketplace

 

 

Sustained Competitive Advantage

Sustained Competitive Advantage: A firm has sustained competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors, and when these other firms are unable to duplicate the benefits of this strategy

 

Sustained Competitive Advantage - 3 Strategic Approaches

  1. Operational excellence: Providing customers with reliable products/services at competitive prices and delivered conveniently (eg. cost efficiency, efficient internal business processes)

  2. Customer intimacy: Personalisation of solutions and service to meet differing customer needs (eg. detailed customer knowledge with operational flexibility so they can respond quickly to almost any need, customizing produce to fulfill special requests)

  3. Product/service leadership: Firms strive to produce a continuous stream of innovative products/services and permanently look for new solutions to their customers' problems

 

RBV: Strategic and Operational Leaders

Strategic (boss)

  • Broader, longer term focus (3-5 years of planning)

  • Identify, acquire and develop the resources. Explore opportunities to create new resources or capabilities that can provide a competitive edge

  • Make decisions that shape competitive strategy, resource allocation priorities, market entry or exit decisions, mergers, acquisition and partnerships

 

Operational (managers):

  • Short term focus (days to months) on execution of the organisations operations

  • Managing and deploying the existing resources effectively

  • Make decisions to optimise resource allocation and implement standard operating procedures (eg. streamline processes, control costs and increase productivity

    5 Phases of Organisation Life Cycle

    1. Startup

    2. Growth: either grows or fails

    3. Maturity: dangers are stagnation, bureaucracy and failure to innovate

    4. Decline: growth and innovation slows, creating diminishing returns

    5. Renewal: can take many forms such as a change in reorganisation in the right direction, merger, acquisition or sale.