Strategic Management/ Business Policy Power Point Set #4: Resources & Capabilities

Resources and Capabilities Strategy from a resource- based approach How do resources create competitive advantage? Value-chain analysis The linkage between organizational learning and capabilities

The Role of Strategy In Business - The Linkage Between Strategy, Resources, & Organization Strategy Resources & Capabilities Organization

Using Value Chain Analysis to Determine the Sources of Competitive Advantage Beyond simply using a value chain analysis to “map out” the sequence of activities, we need to ask the following questions: What is the cost structure of each of these activities? How do we compare with other competitors in each of these areas? What are our strengths and weaknesses?

Value Chain Analysis Outsourcing activities in which it lacks capabilities, the firm can concentrate fully on those areas in which it can create value. For example, Dell Computer Corporation outsources most of its manufacturing and customer service activities, so it can concentrate on creating value through its distribution channels.

Value Chain Analysis Outsourcing activities can have the unintended consequence of damaging the firm’s potential to evaluate continuously its key assumptions, learn, and create new capabilities and core competencies. Therefore, managers should verify that the firm does not outsource activities that stimulate the development of new capabilities and competencies.

Organization and Resources Incentive and Reward Systems Creation of “Knowledge” “Gain-Sharing” Organization Structure Where “Knowledge” Is Located Cross-functional Teams Recruiting and Training Policies Specificity of Knowledge Organization Process The Dynamics of Knowledge Creation