Today’s Agenda Turn in Strategic Analysis Project, Part 1

Key aspects of the ‘Strategically Aligned Firm’ Resources, Capabilities, and Core Competencies

Organizational Responsiveness

Example:

Midterm: New date: Wednesday, February 17 (if this is a problem for you, let me know, since I made a syllabus change)

Preview of Assignment 2 – Wednesday Feb 24

Assignment for Wednesday

The Firm: An Organizing Mechanism

We can think about the firm as having four characteristics:

1. Business Definition: What does the firm do (products/service)? Who does it serve (customers)? How does it serve its customers

2. Organization Structure and Business Model: How is the firm is organized (structure), how does it make money (model: both revenues and costs)

3. Organizational Resources and Capabilities: What does the firm own/control that allow it to create products and/or services?

4. Responsiveness: How does the firms recognize and react to changes in the business environment?

Questions for Discussion

Firm Resources, Capabilities, & Core Competencies

1.What’s the difference between a resource, a capability, and a core competency?

2.What is the linkage between core competencies and competitive advantage?

5

A resource or capability that meets this test will be

a source of sustainable competitive advantage

VRINE test of resources & capabilitiesIdentify key resources and capabilities. Are they: 1. Valuable2. Rare3. Inimitable4. Non-substitutable5. Exploitable (can the company capture the value produced by its resources and capabilities?)

6

Of course, you can make a spreadsheet!

Resource/Capability

Valuable

Rare

Inimitable

Non-substitutable

ExploitableSource of

Comp Adv?

1. Patent for touch screen

Yes Yes Yes Yes Yes Yes

2. Prototype toilet-seat scale

Maybe Yes No No Maybe No

3.

4.

Check the “Source of Competitive Advantage” box only if all the VRINE

columns are marked YES.

7

In-class analysis

Resource/Capability

Valuable

Rare

Inimitable

Non-substitutable

ExploitableSource of

Comp Adv?

1.

2.

3.

4.

5.

On a clean sheet of paper with your name, date and section number on it, take a try at filling this grid out for five of your company’s most important resources and capabilities.

Another New Tool Resource/Capability/Core Comp.

Map

1.Can we draw a resource/capability/core competency (RCC) map?

2.What are the benefits of mapping RCC’s?

Example RCC Mapthe basic relationships

Core Competenc

y(if present)

Capability 2

Resource 1

Resource 2

Resource 3

Which Rs & Cs pass the VRINE test?

Capability 1

Example RCC MapMcDonalds

Core Competenc

y: Marketing to Children under age

10

Capability 2:

Design of Restauran

ts (Play Place)

Resource 1

CashResource

2Brand

Awareness

Resource 3

Locations

All 3 Rs & 2 Cs pass the VRINE test.

Capability 1:

Advertising

(Ronald McDonald

)

In-class Analysis, IIOn the back of your VRINE table, draw a

resource/capability/core competency (RCC) map for your company.

Questions for DiscussionAn important type of capability is organizational

responsiveness – the ability of the firm to notice and respond to changes in the environment (customers, technology, laws & regulation, etc).

What types of resources might work together to improve organizational responsiveness?

Can you use responsiveness to explain firm performance at both Starbucks and Hot Topic?

Can you draw a basic RCC map of Starbucks and Hot Topic and see if there are any potential synergies?

Upcoming WorkFor Wednesday -

Read: Porter's Five Forces: A Model for Industry Analysis

Read: What Banking Needs to Become Download Project Part 2 spreadsheet template from

Course Assignments section of Moodle and bring this to class.

For Monday - Read: Industry Dynamics, A Cognitive Approach Bring industry data on customer demographics,

competitors, products, technologies, and anything else that might be useful in filling in the Part 2 spreadsheet template.