1. STRATEGIC CAPABILITY
By: Vedika Saraf Swagata Giri Yukti Agarwal Vikram Pesswani Vivek Sood Srishti Seth Sumalya Chakraborty Tanushree VIJAYWARGI Tarun Vohra

2. Sustainable Competitive Advantage
Chapter 2
External Environment
What the Firm Might Do
Sustainable
Competitive
Advantage
Chapter 3
Internal Environment
What the Firm Can Do 5

3. STRATEGY DEVELOPMENT
Changing strategic capability better to fit a changing environment.
Creation of new opportunities by stretching and exploiting the strategic capability.

4. RESOURCES There are two types of resources: Tangible resources:
Eg: Buildings, plant, labor and finance
Intangible resources:
Eg: Information, reputation and knowledge

5. NIZATI RESOURCESSOURCES
Physical resources
Financial resources
Human resources
Intellectual resources

6. Resources
Competences
Threshold resources
Tangible
Intangible
Threshold competences
Threshold capabilities
Capabilities for competitive advantage
Unique Resources:
Resources that provide competitive advantage
Core competence:
Competence that cannot be easily imitate or obtained
STRATEGIC CAPABILITIES AND COMPETITIVE ADVANTAGE

7. Cost Efficiency This can be achieved through:
Appropriate Resources
Managing those resources
Attaining cost efficiency has become important for companies
Value for money
Competitive rivalry

8. Cost Efficiency Cost Drivers Economies of Scale Supply Cost
Product/ Process Design
Experience
So, with the help of all these drivers companies can get relative cost advantage over competitors.

9. Capabilities For Sustainable Competitive Advantage
Value for customers:
Strategic capabilities of the organization should provide value to the customers.
Rarity of strategic capabilities:
Achieve resources which are rare in nature like Specific individual
Organization having secured preferred access to customers or supplier
Organizations having advantage by achieving the sunk cost.

10. Robustness of strategic capabilities
It involves identifying capabilities that are likely to be durable and which competitors find difficult to imitate or obtain.
Complexity
Internal linkages
External linkages
Culture and history
Causal ambiguity
Characteristic ambiguity
Linkage ambiguity

11. NON-SUBSTITUTABILITY
Possessing competencies that are complex, culturally embedded & causally ambiguous.
Related to 5 forces model of competition. E.g. s substituting postal service.
Substitution at competence level. i.e. Skills

12. DYNAMIC CAPABILITIES
Change competencies to meet the needs of rapid changing environment.
Acquisitions or Alliances.
Build capacity to change, innovate and learn.

13. ORGANISATIONAL KNOWLEDGE
Accumulated through systems, routines and activities.
Required due to organizational complexity and sophisticated information systems.
Essential social process relying on communities of interest.
Higher degree of formality leads to danger of imitation.

14. Value Chain
It describes the activities within and around an organization which together create a product or service.
Determines whether or not the best value products or services have been developed.

15. Identifying Resources and Capabilities That Can Add Value
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
Support
Activities
Inbound
Logistics
Primary Activities

16. Identifying Resources and Capabilities That Can Add Value
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
Support
Activities
Inbound
Logistics
Operations
Primary Activities

17. Identifying Resources and Capabilities That Can Add Value
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
Support
Activities
Inbound
Logistics
Outbound
Logistics
Operations
Primary Activities

18. Identifying Resources and Capabilities That Can Add Value
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
Support
Activities
Inbound
Logistics
Outbound
Logistics
Marketing
& Sales
Operations
Primary Activities

19. Identifying Resources and Capabilities That Can Add Value
Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
Support
Activities
Service
Inbound
Logistics
Outbound
Logistics
Marketing
& Sales
Operations
Primary Activities

20. Value Chain Analysis Firm Infrastructure Human Resource Management
Identifying Resources and Capabilities That Can Add Value
Firm Infrastructure
Human Resource Management
Support
Activities
MARGIN
Technological Development
Procurement
Service
Inbound
Logistics
Outbound
Logistics
Marketing
& Sales
MARGIN
Operations
Primary Activities

21. Value Network
The set of inter organizational links and relationships that are necessary to create a product or service.
It is important for any organization to understand the basis of their strategic capabilities in relation to the wider value network.

22. Value Network
Identify activities are centrally important to their own strategic capability.
Identify the profit pools.
Decide to make or to buy.
Know the best partners in various parts of the value network and the relationships to be developed with them.

23. ACTIVITY MAPS
Tries to show how different activities of an organisation are linked together.
How is it mapped?
Critical Success factors(CSF)
Consistency
Reinforcement
Difficulties in imitation(built over a long period of time culturally embedded, complex & causally ambiguous)
Trade Offs

25. BENCHMARKING
Benchmarking is the process of determining who is the very best, who sets the standard, and what that standard is.
Application of benchmarking involves four key steps:
(1) Understand in detail existing business processes.
(2) Analyze the business processes of others.
(3) Compare own business performance with that of others
analyzed.
(4) Implement the steps necessary to close the performance gap.

26. TYPES OF BENCHMARKING Historical Benchmarking - Comparing with self
- Complacent
Industry/sector Benchmarking
- Comparing with firms within the same industry or similar firms
- Firms in other industries that can satisfy the same needs
- Industry convergence
Best-in-class benchmarking
- Best practices
- Ex. British airways – aircraft processes from Formula one

27. VALUE OF BENCHMARKING
It is a process for gaining momentum for improvement and change rather than mechanics of comparisons.
It may lead to a situation where you get what you measure but it is not what you intended to measure strategically. As a result, if the basis of benchmarking is flawed it can set off a reorientation of strategies that are flawed.
Only identifies good and bad performance but not the reasons for such performance.

28. Competitor SWOT analyses
SWOT ANALYSIS
It explores the relationship between the environmental influences and the strategic capabilities of an organization compared to its competitors.
Competitor SWOT analyses
A positive (+) score denotes that the strength of the company would help it take advantage of, or counteract a problem arising from an environmental change or that a weakness would be offset by that change.
A negative (–) score denotes the strength would be reduced by such change or that a weakness would prevent the organization from overcoming problems associated with that change.

29. Managing Strategic Capability
Limitations of managing strategic capabilities *Competences are values but not understood *Competences are not valued *Competences are recognized, valued and understood Stretching and adding capabilities *Extending best practices *Ceasing activities *Adding and changing activities *External capability dev. *Stretching competences *Building on apparent weaknesses

30. Managing Strategic Capability
Managing People for capability development
*Targeted training and development
*HR policies
*Develop people’s awareness
Building dynamic capabilities
*Learning Organization
*Knowledge creation-
1) Socialization
2)Externalization
3)Combination
4)Internalization

31. THANK YOU