module 1 internal environment analysis. content resources capabilities competencies ( distinctive ...
DESCRIPTION
Importance of analysis of internal organization – Global mind-set ’ Ability to study an internal environment in ways that do not depend on the assumptions of a single country, culture, or context – Analyze firm ’ s portfolio of resources and bundle heterogeneous resources and capabilities Understand how to leverage these bundles – An organization's core competencies creates and sustains its competitive advantageTRANSCRIPT
Module 1
Internal Environment Analysis
Content
• Resources• Capabilities• Competencies ( distinctive & core)• Competitive advantage • Sustainable Competitive advantage
Importance of analysis of internal organization
– Global mind-set’• Ability to study an internal environment in ways that do
not depend on the assumptions of a single country, culture, or context
– Analyze firm’s portfolio of resources and bundle heterogeneous resources and capabilities• Understand how to leverage these bundles
– An organization's core competencies creates and sustains its competitive advantage
Conditions Affecting Managerial Decisions About Resources, Capabilities, and Core
Competencies
Resources, Capabilities, and Core Competencies
• Resources, capabilities and core competencies are the foundation of competitive advantage.
Resources
• Competitive advantage is generally based on the unique bundling of several resources.
• Tangible resource• Intangible resources
Tangible Resources
These are the assets that can be seen and quantified.1. Financial resources ( borrowing capacity, ability
generate internal fund)2. Organizational resources( formal reporting
structure, planning, coordinating system)3. Physical resources ( access of raw material,
location of the plant)4. Technological resources ( patent, copyright,
trademark)
Intangible Resources
These are the assets that can be seen and quantified.1. Human resources (knowledge, trust)2. Innovation resources (ideas, capacity to
innovative)3. Reputational resources (brand name, reputation
with suppliers)
Capabilities
• Capabilities exist when resources have been purposely integrated to achieve a specific task or set of tasks.
Capabilities- example
1. Distribution : effective use of logistic2. HR : retaining employees, job satisfaction3. MIS :control of inventory4. Marketing : innovative product design, customer
satisfaction 5. Management : effective organization structure 6. Manufacturing : quality , 7. R & D : Innovative technology
Capabilities
Following characteristic of capabilities are source of competitive advantage:
• Valuable• Rare• Costly to imitate• Nonsubstitutable
Core competencies
Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rival.
It distinguishes company from the competitors and reflects firm’s strength.
Competitive advantage sustainable competitive advantage