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Mathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions capabilityis thecapacity of a firm to competently perform someinternal activity. Capabilities are developed andenabled through the deployment of a firm’sresources.CORE CONCEPT Resource and Capability Analysis•Analyzing the resources and capabilities of acompany is a two-step process:1.Identify thecompany’smost competitively importantresources and capabilities.2.Apply the four tests of competitive power toascertain which resources and capabilities cansupport a sustainable competitive advantage overrival firms. Identifying Competitively ImportantResources and Capabilities•Common types of valuable resources andcompetitive capabilities include:Skills or specialized expertise in a competitivelyimportant capabilityUp-to-date physical assetsUnique human assets or intellectual capitalSuperior organizational assetsInimitable intangible assetsExclusive competitive alliances or cooperativeventures TABLE 4.1Common Types of Tangible ResourcesTangible ResourcesPhysicalresourcesState-of-the-art manufacturing plants and equipment,efficient distribution facilities, attractive real estatelocations, or ownership of valuable natural resourcedepositsFinancialresourcesCash and cash equivalents, marketable securities, andother financial assets such as a company’s credit ratingand borrowing capacityTechnologicalassetsPatents, copyrights, superior production technology, andtechnologies that enable activitiesOrganizationalresourcesInformation and communication systems (servers,workstations, etc.), proven quality control systems, andstrong network of distributors or retail dealers TABLE 4.1Common Types of Intangible ResourcesIntangible ResourcesHuman assets andintellectual capitalAn experienced and capable workforce, talentedemployees in key areas, collective learningembedded in the organization, or provenmanagerial know-howBrand, image, andreputational assetsBrand names, trademarks, product or companyimage, buyer loyalty, and reputation for quality,superior serviceRelationshipsAlliances or joint ventures that provide access totechnologies, specialized know-how, orgeographic markets, and trust established withvarious partnersCompany cultureThe norms of behavior, business principles, andingrained beliefs within the company Is the resource or capabilitycompetitively valuable? What's the difference between a resource and a capability?While resources refer to what an organization owns, capabilities refer to what the organization can do. More specifically, capabilities refer to the firm's ability to bundle, manage, or otherwise exploit resources in a manner that provides value added and, hopefully, advantage over competitors.
When a company is good at performing a particular internal activity?a distinctive competence is a competitively relevant internal activity that a firm performs especially well relative to other internal activities, whereas a core competence is a competitively important activity performed by key strategic allies.
Is a proficiently performed internal activity?A core competence is a proficiently performed internal activity that is central to a company's strategy and is typically distinctive as well.
Which of the following is the best definition of a firm's distinctive competence?Distinctive competence refers to a superior characteristic, strength, or quality that distinguishes a company from its competitors. This distinctive quality can be just about anything—innovation, a skill, design, technology, name recognition, marketing, workforce, customer satisfaction, or even being first to market.
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