Strategic&Capabilities&and&Competitive&Advantage

Strategic&Capabilities&and&Competitive&Advantage&
&
The(four(criteria(by(which(capabilities(can(assessed(in(terms(of(providing(a(basis(
for(achieving(sustainable(competitive(advantage(are(VRIO(
(
1. Value(
(
!(Do(capabilities(exist(that(are(valued(by(customers(and(enable(the(organisation(
to(respond(to(environmental(opportunities(or(threats(
(
Strategic(Capabilities(are(of(value(when(they:(
• Take(advantage(of(opportunities(and(neutralize(threats(
• Provide(value(to(customers(
• Are(provided(at(a(cost(that(still(allows(an(organisation(to(make(an(
acceptable(return(
(
2. Rarity(
(
!(Do(capabilities(exist(that(no((or(few)(competitors(possess?(
(
• Rare(capabilities(are(those(possessed(uniquely(by(one(organisation(or(
only(by(a(few(others((e.g.(a(company(may(have(patented(products,(have(
supremely(talent(people(or(a(powerful(brand)(
• Rarity(could(be(temporary((e.g.(patents(expire,(key(individuals(can(leave(
or(brands(can(be(deFvalued(by(adverse(publicity(
(
3. Inimitability(
(
!(Are(capabilities(difficult(and(costly(for(competitors(to(obtain(or(imitate?(
(
Inimitable(capabilities(are(those(that(competitors(find(difficult(and(costly(to(
imitate,(to(obtain(or(to(substitute(
(
• Competitive(advantage(can(be(built(on(unique(resources((a(key(individual(
or(IT(system)(but(these(may(not(always(be(sustainable((key(people(leave(
or(others(acquire(same(systems(ECT)(
• Sustainable(advantage(is(more(often(found(in(competences((the(way(
resources(are(managed,(developed(and(deployed)(and(the(way(
competences(are(linked(together(and(integrated(
(
4. Organisational(Support(
(
!(Is(the(organisation(appropriately(organised(to(exploit(the(capabilities(
(
The(organisation(must(be(suitably(organised(to(support(the(valuable,(rare(and(
inimitable(capabilities(that(it(has.(This(includes(appropriate(processes(and(
systems(
(
(
Mapping&Activity&Systems&
•
•
Identify(higher(order(strategic(themes,(that(is(how(the(organisation(meets(
critical(success(factors(in(the(market(
Indentify(the(clusters(of(activities(that(underpin(these(themes(and(how(
they(fit(together(
Map(this(in(terms(of(how(activity(systems(are(interrelated(
•
(
Use&of&Activity&System&Maps&
• Relationship(to(the(value(chain&
o Understanding(and(indentifying(strategic(capabilities(in(terms(of(
activities(and(linkages&
• The(importance(of(linkages(and(fit&
o How(the(internal(and(external(activities(create(value(for(customers(
by(supporting(each(other&
• Relationship(to(VRIO&
o How(these(activities(and(the(way(they(link/fit(together(can(be(the(
source(of(sustainable(competitive(advantage&
&
Internal&Factor&Evaluation&Matrix&(IFE)&
•
•
An(analytical(tool(for(systematic(analysis(and(presentation(of(the(strong(
and(weak(points(of(a(company(
These(strong/weak(points(are(indentified(through(your(analysis(of(the(
strategic(capabilities(of(a(focal(firm((using(VRIO(framework,(value(chain(
analysis,(value(systems(and(network(analysis)(
(
(
SWOT&Analysis&
Provides(a(general(summary(of(the(strengths(and(weaknesses(explored(in(an(
analysis(of(strategic(capabilities(and(opportunities(and(threats(explored(in(an(
analysis(of(the(environment(
(
Internal(Analysis(–(Strengths(and(Weaknesses(
External(Analysis(–(Opportunities(and(Threats(
(
Uses&of&SWOT&
• Used(to(examine(capabilities(strengths(and(weaknesses(in(relation(to(
competitors&
• Focus(on(strengths(and(weaknesses(that(differ(in(relative(terms(compared(
to(competitors(and(leave(out(areas(where(the(organisation(is(at(par&
• Focus(on(opportunities(and(threats(which(are(directly(relevant(for(specific(
organisation(and(industry(and(leave(out(general(broad(factors&
&
Dangers&of&SWOT&
• Long(lists(with(no(attempt(at(prioritsation(
• Over(generalization(–(sweeping(statements(often(based(on(bias(and(
unsupported(opinions(
•
•
SWOT(is(used(as(a(substitute(for(analysis,(but(should(result(from(a(
detailed(analysis(first(
SWOT(is(not(used(to(guide(strategy,(it(is(seen(as(an(end(in(itself(
Developing&Strategic&Capabilities&
Internal&Capability&Development&
• Building(and(recombining(capabilities(–(this(requires(creative(
entrepreneurial(skills((e.g.(a(culture(that(promotes(capability(innovation)&
• Leveraging(Capabilities(–(identifying(capabilities(in(one(part(of(the(
organisation(and(transferring(them(to(other(parts((sharing(best(practice)&
• Strengthening(capabilities(–(building(new(products(or(services(out(of(
existing(capabilities&
&
External&Capability&Development&
Adding(capabilities(through(mergers,(acquisitions(or(alliances(
(
Ceasing&Activities&
Non(core(activities(can(be(stopped,(outsourced(or(reduced(in(cost(
(
Monitor&outputs&and&benefits&
To(better(understand(sources(of(consumer(benefit(and(enhance(anything(that(
contributes(to(this(
(
Awareness&Development&
Recognising(what(enhances(strategy.(Training,(development(and(organisational(
learning(are(important(
(
(
Topic&Summary&
•
•
The(competitive(advantage(of(an(organisation(is(based(on(the(strategic(
capabilities(it(has(that(are(valuable(to(customers,(and(that(rivals(do(not(
have(or(have(difficult(obtaining.(Strategic(Capabilities(comprise(of(both(
resources(and(competences(
The(concept(of(dynamic(capabilities(highlights(that(strategic(capabilities(
need(to(change(as(the(market(and(environmental(context(of(an(
organisation(changes(
(
Ways(of(diagnosing(organisation(capabilities(include;(
• Benchmarking(–(as(a(means(of(understanding(the(relative(performance(of(
organisations(
• VRIO(analysis(of(strategic(capabilities(as(a(tool(to(evaluate(if(they(
contribute(to(competitive(advantage(
• Analysing(an(organisations(value(chain(and(value(system(as(a(basis(for(
understanding(how(value(to(a(customer(is(created(and(can(be(developed(
• Activity(mapping(–(as(a(means(for(identifying(more(detailed(activities(
which(underpin(strategic(capabilities(
• SWOT(Analysis(as(a(way(of(drawing(together(an(understanding(of(
strengths,(weaknesses,(opportunities(and(threats(an(organisations(faces(
(
Topic&4A&–&Strategic&Purpose&
&
Learning(Outcomes(
• Assess(the(strategic(purpose(of(an(organisation(in(terms(of(missions,(
vision,(values(and(objectives(
• Evaluate(the(implications(for(strategic(purpose(of(the(shareholder(and(
stakeholder(models(of(corporate(governance(
• Undertake(stakeholder(analysis(as(a(means(of(identifying(the(influence(of(
different(stakeholder(groups(in(terms(of(their(power(and(interest(
• Relate(corporate(responsibility(and(personal(ethics(to(purpose(and(
strategy(
(
Influences&on&Strategic&Purpose&
1. Ownership&
2. Governance&
3. Stakeholders&
4. Social(Responsibility&
&
(
Mission&Statements&
Aims(to(provide(employees(and(stakeholders(with(clarity(about(what(the(
organisation(is(fundamentally(there(to(do(
• What(business(are(we(in(
• What(would(be(lost(if(we(did(not(exist(
• How(do(we(make(a(difference(
• Why(do(we(do(this(
(
Visions&Statements&
Is(concerned(with(the(future(the(organisation(seeks(to(create(
• It(is(an(aspiration(that(will(enthuse,(gain(commitment(and(stretch(
performance(
• What(do(we(want(to(achieve(
• If(we(were(sitting(here(in(20(years(what(do(we(want(to(have(created(
(
Statement&of&Corporate&Values&
Should(communicate(the(underlying(and(enduring(core(principles(that(guide(an(
organisations(strategy(and(define(the(way(the(organisation(should(operate(
• Such(core(values(should(remain(intact(whatever(the(circumstances(and(
constraints(faced(by(the(organisation(
(
Objectives&
Are(statements(of(specific(outcomes(that(are(to(be(achieved(
(
Key&Principles&
Focus:(Effective(statements(do(not(just(define(what(the(organisation(does(but(
also(excludes(other(activities(
(
There)are)three)main)characteristics)of)logical)incrementalism)
1. Environmental)Uncertainty)–)constant)environment)scanning)and)change)
2. General)Goals)–)avoiding)too)early)commitment)to)specific)goals)
3. Experimentation)–)building)a)strong)but)flexible)core)business)to)engaging)
in)side)bet)ventures)to)test)out)new)strategies)
)
Strategy&and&Political&Processes&
The)political)view)of)strategy)development)is)that)strategies)develop)as)the)
outcome)of)bargaining)and)negotiation)among)powerful)interest)groups)
)
The)Approach)of)different)people)to)strategic)problems)is)influenced)by)
• Personal)Experience)
• Competition)for)resources)and)influence)
• The)relative)influence)of)stakeholders)
• Different)access)to)information)
)
Strategy&as&continuity&
Continuity)is)likely)to)be)a)feature)of)strategy)because)of)
• Emergent)strategy)as)managed)continuity)
o Each)strategic)move)is)informed)by)the)rationale)of)the)previous)
one)
• Path)dependent)strategy)
o Strategic)decisions)can)be)a)result)of)historical)pre)conditions)
• Organisation)culture)and)strategy)development)
o Strategy)is)the)outcome)of)the)taken)for)granted)assumptions,)
routines)and)behaviours)of)an)organisation)
)
Strategy&and&Organisational&Systems&
Strategy)development)as)the)outcome)of)managers)making)sense)of,)and)dealing)
with,)strategic)issues)by)applying)established)ways)of)doing)things)
)
• Strategy)development)is)influenced)by)the)systems)and)routines)with)
which)managers)are)familiar)in)their)particular)context)
)
Implications&for&Managing&Strategy&Development&
•
•
)
Multiple)strategy)development)processes)–)most)organisations)develop)
strategy)through)several)different)processes)
There)is)no)one)right)way)to)develop)strategy)but)the)context)can)be)
important)
Topic&Summary&
•
•
•
Deliberate)strategy)is)the)desired)strategic)direction)deliberately)planned)
by)managers&
Emergent)strategy)develops)in)a)less)deliberate)way)from)the)behaviours)
and)activities)inherent)within)an)organisation&
Typically)strategy)development)is)described)in)terms)of)a)deliberately)
formulated)strategy)as)a)result)of)planning)systems&