Group 1 Report - Chapter 6

CHARTER 6
STRATEGIC ANALYSIS: PART II

INTERNAL ANALYSIS:
RESOURCES, CAPABILITIES,
COMPETITIVE ADVANTAGE, AND
FIRM PERFORMANCE
GROUP 1
INTERNAL ANALYSIS: LOOKING INSIDE
THE FIRM FOR CORE COMPETENCIES
This section will explore the analytical tools to explain why
differences in firm performance exist even within the same
industry. To formulate and implement a strategy that enhances the
firm’s chances of gaining and sustaining competitive advantage, the
firm must have certain types of resources and capabilities that
combine to form core competencies. These in turn are leveraged
through the firm’s activities.
CREATING A STRATEGIC FIT TO LEVERAGE A FIRM’S INTERNAL STRENGTHS
TO EXPLOIT EXTERNAL OPPORTUNITIES
ASSESMENTS OF THE
FIRM’S RESOURCES
Resources are a property that a company can draw on
when crafting and executing a strategy. Resources can
be either tangible or intangible.
Capabilities are the organizational and managerial

skills necessary to orchestrate a diverse set of
resources and to deploy them strategically.
ASSESMENTS OF THE FIRM’S RESOURCES
Capabilities are by nature intangible. They find

their expression in a company's structure, routines,
and processes.
Activities enable firms to add value by

transforming inputs into goods and services.
TANGIBLE RESOURCES
Tangible Resources have physical
attributes and are visible. Examples of
tangible resources are:
Capital
Land
Buildings
Plant
Equipment
Supplies
INTANGIBLE RESOURCES
Intangible Resources have no physical attributes and thus
are invisible. Examples of intangible resources are
• Culture
• Knowledge
• Brand Equity
• Reputation
• Intellectual Property
Patents
Copyrights
Trademarks
Trade Secrets
THE VALUE CHAIN AND
ACTIVITY SYSTEM
A value chain is the process of business activities
through which a company creates a product and
presents it to consumers. It works by identifying the
production activities that give a company its
competitive advantage either through cost
reduction or product differentiation and presenting
a product that provides value to consumers.
PRIMARY AND SUPPORT
ACTIVITIES
The primary activities add value directly as
the firm transforms inputs into outputs -
from raw materials through production
phases to sales and marketing and finally
customer service.
THE VALUE CHAIN: PRIMARY
AND SUPPORT ACTIVITIES
PRIMARY ACTIVITIES
STRATEGIC ACTIVITY SYSTEM
A strategic activity system sees a firm as a complex network
of connected activities crucial for creating value and
maintaining competitive advantage. Managers must
continuously evolve these activities to adapt to changes in
the external environment and keep pace with competitors.
Upgrading, adding, or removing activities is essential to
enhance resources and capabilities, ensuring sustainable
competitive advantages.
HOW COMPETITIVE ADVANTAGE CAN BE DRIVEN BY CORE
COMPETENCIES
Core Competencies are unique strengths, embedded

deep within a firm, that allow a firm to differentiate
its products and sources from those of its rivals,
creating higher value for the customer or offering
products and services of comparable value at lower
cost.
HOW TO PROTECT A COMPETITIVE ADVANTAGE
Specific internal conditions may exist - above and beyond core
competencies that might help a firm protect and sustain its
competitive advantage. Although no competitive advantage can be
sustained indefinitely, several conditions can offer some protection
to a successful firm by making it costly for competitors to imitate
the resources or capabilities that underlie its competitive
advantage:
better expectations of future resource value (or simply luck),
path dependence,
casual ambiguity, and
social complexity.
PATH DEPENDENCE
Path Dependence describes a process in
which the options one faces in a current
situation are limited by decisions made
in the past. Often, early events –
sometimes even random ones - have a
significant effect on final outcomes.
CASUAL AMBIGUITY
Casual Ambiguity is a situation in which the
cause and effect of a phenomenon are not
readily apparent. We have defined strategy as
the managers' theory of how to compete for
advantage. This definition implies that
managers need to have some kind of
understanding about causes for superior and
inferior performance.
SOCIAL
COMPLEXITY
Social Complexity describes situations
in which different social and business
systems interact with one another.
GROUP 1
BATION, PATRICIA ANNE MARIE
BAGALAY, MARLA JOY
LIM, JASON LAORENZ
NORTADO, JUSTINE FRANCE
PACIS, CHARLIZZE ALEXI
PADUA, CELINDA
PARROCHA, FAITH CHARLENE
PIDO, MYLENE
SERAFICA, CYNTHIA
VILLAFANIA, MA. DEVIE
THANK YOU
VERY MUCH!

Group 1 Report - Chapter 6

Uploaded by

Copyright:

Available Formats

Group 1 Report - Chapter 6

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Group 1 Report - Chapter 6

Uploaded by

Copyright:

Available Formats

CHARTER 6

STRATEGIC ANALYSIS: PART II

Capabilities are the organizational and managerial

Capabilities are by nature intangible. They find

Activities enable firms to add value by

Core Competencies are unique strengths, embedded

You might also like