Resources and Capabilities. Part I: Foundations of Global Strategy

Transcription

1 c h a p t e r 3c chapter 3chapter Resources and Capabilities Part I: Foundations of Global Strategy Global Global Strategic Strategy Management Mike W. PengMike W. Peng

2 Outline Understanding resources and capabilities Resources, capabilities, and the value chain The VRIO framework Debates and extensions The savvy strategist 3 2

3 Tangible Understanding Resources and Capabilities Resources and capabilities that are observable and easily quantified Broadly organized in four categories: Financial Physical Technological Organizational Intangible Resources and capabilities not easily observed or difficult (or impossible) to quantify Examples include: Human Innovation Reputational 3 3

4 Value Chain Resources, Capabilities, and the Value Chain The functional activities within the firm that create value in the goods and services produced Components of the Value Chain Primary activities Are directly associated with the development, production, and distribution of goods and services Support activities Assist in the accomplishment of primary activities 3 4

5 The VRIO Framework: Value and Rarity Four fundamental questions of VRIO Value: do the resources and capabilities add value? Necessary for a competitive advantage Rarity: how rare are the valuable resources and capabilities? Valuable, but common parity, not advantage Valuable and rare can lead to temporary advantage If everyone has it, you can t make money from it 3 5

6 The VRIO Framework: Imitability Easier to imitate tangible resources/capabilities than tangible ones Two ways to imitate - direct duplication and substitution Direct duplication - most difficult Substitution - less challenging, but not easy Why is imitation so difficult? Hard to acquire in a short time what competitors have developed over a long time Events earlier in time affect future events Difficult to identify causal determinants of performance 3 6

7 The VRIO Framework: Imitability (cont d) Valuable, rare, but imitable resources/capabilities = temporary advantage Only valuable, rare and hard-to-imitate resources/capabilities = sustained competitive advantage 3 7

8 The VRIO Framework: Organization The Question of Organization How is a firm organized to develop and leverage the full potential of its resources and capabilities? Using complementary assets effectively Managing social complexity effectively Invisible relationships can add value - make imitation more difficult 3 8

9 Debates and Extensions Firm- versus Industry-Specific Determinants of Performance: Both views are complementary to each other Static Resources versus Dynamic Capabilities The resource-based view: incorporating dynamic capabilities Tacit knowledge Learning before doing versus learning by doing Simple rules to guide behavior and decisions Develop new resources/capabilities Less bundled resources/capabilities 3 9

10 The Savvy Strategist Developing resources/capabilities that are valuable, rare, hard-to-imitate, and embedded in organizational structures and systems can help firms achieve successful performance Lessons from the VRIO framework Task for strategists - build firm strengths by identifying, developing, and leveraging resources/capabilities Imitation is not likely to be a successful strategy Sustained competitive advantage will not last forever Firms should try to develop strategic foresight 3 10

11 The Savvy Strategist (cont d) Four fundamental questions: Resource Based Views Why do firms differ? Resource heterogeneity How do firms behave? Take advantage of strengths and overcome weaknesses What determines the scope of the firm? How a firm performs relative to rivals What determines the international success and failure of firms? Firm-specific resources/capabilities and a bit of luck 3 11