1 capabilities of organization: sets of resources and processes for competitive advantage objective...
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Capabilities of organization: sets of resources and processes for competitive advantage
Objective of the presentation: a) explain how concept of capabilities allows to undestand competitive successb) review path dependent nature of capabilities and dangers of lock-in
assoc. prof. Mantas VilkasKaunas University of Technology Lithuania, [email protected]
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The concept of capabilities
A capability is a strength of a bundle of interrelated processes for performing specific tasks
Capability – is bundle of processes, shaped by (specific) asset position, and the paths available to it
Hermetizers of oil rigs
Tried out technology and construction for packers
Investment in equipment and learning
Partnerships and confidence in oil sector
Technology for testing
Confident providers of materials and parts
Processing long metal elements by turning
Are your capabilities real?1. The test of consumer relevance: Is the capability relevant to customers
??
Are your capabilities real? 2. The test of inimitability: Is the capability hard to copy?
Unique assets
Techno-logiesIntangible assets
Causal ambiguity/ Complexity
Are your capabilities real?
2. The test of consumer relevance: Is the capability relevant to customers
3. The test of appropriability: Who captures the value that the capability creates?
4. The test of substitutability: Can a unique capability be trumped by a different capability?
Plasma - LCD - CRT
5. The test of competitive superiority: Whose capability is really better?
From competitive advantage to core rigidity
The same objectives may be achieved by various approaches Imaging -> lcd, plasma, crt, projectors pull systems -> management information systems versus pull
lean methods Decisions restrict future opportunities
Stumbras closed its distillery
Organizational paths based on capabilities
Path dependent nature of Ekranas behaviour
Formation phase
Capabilities:1. Colour kinescopes for TV’s2. Glass techn. for srceens and stacks3. Electronic optical systems
Self-reinforcing dynamics Success (appr. 25% WEurope market for small and medium
colour kinescopes; 70 % of exports; appr. 3-5 mln of kinescopes/year) because of complementary/ learning mechanisms lead to increase investment into present capabilities
Lock-in phase Ekranas efforts employed in lock-
in stage1. Flat’erization of kinescopes2. Cost reduction by economies of
scale3. Protection of European market
by antidumping tariffs
“I don’t say that we has not made mistakes. I doubt that we would achieve something more, if we would behave differently. Of course, we had to think of new technologies more early, but we had no choice. Therefore our strategy was as long as possible to be simple product manufacturing and hope that Lithuanian priorities will change” E.Žvybas, 2007 02 20 Verslo žinios”
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Questions on Capabilities of organization: sets of resources and processes for competitive advantage
Contacts:assoc. prof. Mantas VilkasKaunas University of Technology, Lithuania, [email protected]
CRT vs LCD tvs