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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?