Internal Analysis - MGT 4090 Week 4 Session 1

Introduction

  • Course: MGT 4090 Management Policy & Strategy

  • Week 4, Session 1 Date: January 27, 2026

Agenda

  • Recap of Resource-Based View (RBV)

  • Introduction to Dynamic Capabilities

  • Practice Questions

  • MiniCase 4: Dr. Dre’s Core Competency

Recap of Resource-Based View (RBV)

  • Overview of VRIO Framework, which assesses a firm's resources and capabilities based on the criteria of Value, Rarity, Imitability, and Organization.

    • VRIO Framework:

      • Value: Does the resource enable a firm to respond to environmental opportunities or threats?

      • Rarity: Is the resource controlled by a relatively small number of firms?

      • Imitability: Is it costly for other firms to acquire or develop the resource?

      • Organization: Is the firm organized to exploit the resource?

Learning Outcomes

  1. Understand the necessity to update firm-level resources continually.

  2. Develop and implement dynamic capabilities for the organization.

Dynamic Capabilities

  • Definition: A firm’s ability to adapt resources over time to achieve a strategic advantage.

    • Key actions:

      • Create: Develop new capabilities or resources.

      • Deploy: Utilize resources effectively to maximize impact.

      • Modify: Alter existing resources to meet changing demands.

      • Reconfigure: Rearrange resources for optimal performance.

      • Upgrade: Improve existing resources or capabilities.

      • Leverage: Use resources to gain competitive advantage.

  • Goal of Dynamic Capabilities:

    • To create a long-term competitive advantage through the continuous development of resources, capabilities, and competencies in alignment with the firm's environment.

    • Adapt and change dynamically in response to market and environmental shifts.

The Dynamic Capabilities Perspective

  • Model emphasizing a firm's ability to modify and leverage its resource base.

  • Resource Stocks: Current level of a firm's intangible resources, including:

    • New product development expertise

    • Engineering skillsets

    • Innovation capabilities

  • Resource Flows: Level of investment directed towards maintaining or developing these resources.

The Bathtub Metaphor

  • A metaphor depicting dynamics of resource accumulation based on the work of I. Dierickx and K. Cool (1989) that illustrates how firms build and sustain competitive advantages through resource management.

Steps in Dynamic Capabilities

  1. Sensing:

    • Identifying and evaluating potential opportunities in the market.

  2. Seizing:

    • Mobilizing and deploying resources to take advantage of recognized opportunities.

  3. Transforming:

    • Implementing product and process innovations along with effective knowledge management practices.

Competitive Advantage Considerations

  • Questions to evaluate your competitive advantage:

    1. What strengths and weaknesses do you possess?

      • How can strengths be leveraged?

      • How can weaknesses be mitigated?

    2. What steps are being taken to ensure dynamic capabilities are maintained?

    3. Are certain strengths valuable, rare, and difficult to imitate?

Summary

  • Key takeaways from this session:

    • The necessity for firms to continuously update and adapt their resource bases.

    • Understanding dynamic capabilities to thrive in an ever-changing business environment.

  • Method of active learning through practice questions related to dynamic capabilities.

  • Case study exploration of Dr. Dre’s core competencies and competitive strategies.

Next Session Details

  • Scheduled for Thursday, January 29, 2026.

  • Focus Topic: Competitive Advantage

  • Assigned Reading: Chapter 5 of the course material.

Conclusion

  • Closing remarks and appreciation for participation in Week 4, Session 1 of MGT 4090 Management Policy & Strategy.