Resource Based Strategy: Strategy and Resources: An Introduction

1
RESOURCE BASED
STRATEGY
Strategy and resources: an introduction

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Course Objective
• To understand the types and characteristics of resources
associated with the organization
• To learn the methods for assessing the resource needs of
the organization; and
• To understand the process of resource acquisition,
retention and development
3
AOL focus
• The course will focus on the learning goal of decision
making, along with the goal of functional learning in
strategy. The learning goal of decision making will be
covered in the case through use of cases which will
provide the context for analysis on all key topics. The level
of decision making skill will be evaluated through a written
examination (mid term) involving cases on which specific
questions will be asked that address each dimension of
decision making.
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Evaluation component
End-Term 40%
Mid term exam 25%
Assignments 20%
Quiz on case discussions 10%
Class Presentation 5%
The overall grades, based on the relative performance of the participants.
For assignment – On any of the topics discussed in the course- analysis of one or
more firms with regard to these topics- Format- Around 6-8 pages of text, analysis in
your own words, 12 font, 1.5 line spacing, 1 inch margins, no photographs, On cover
page- only title and names/roll numbers of all group members.
For presentation, answer questions, submit slides before the sessions, presentations
to happen during the session.
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Strategic management- current consensus
• What is the common understanding about

strategy content and process?
6
Strategic management- current consensus
• Definition, framework, dominant ways of

thinking- SCP, business and corp strategy
• Key dilemmas- short term vs long term
focus, thinking like a firm
• Concepts – such as strategy, goals,
mission, vision, intent
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Questions for strategic theories

• Where should we compete?
• How can we gain and sustain advantage?
• What assets, capabilities, structures, systems and culture
do we need to deliver the strategy?
• What do we look like now?
• How can we change?
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Questions for strategic theories

• Which theories inform strategic management?
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Key issues in strategic

management
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Key issues in strategic

management
• How to sustain value creation
• How to handle (or employ) imitation
• What is the boundary of the firm
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Frameworks in Business strategy

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Strategy stated as (beyond vision, mission and

values)
• Goals or objectives- ends
• Scope- domain
• Advantage- means
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Frameworks in Business strategy

• LCAG
• Porters industry five forces and positioning- generic
strategies
• Value disciplines- Operational excellence, customer
intimacy, and product leadership
• The stakeholder model
• Strategic planning and capital planning frameworks
• Balanced scorecard
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LCAG framework- implications for

resources
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Porter’s industry five forces, positioning

and generic strategies
• Five forces
• Positioning-
• Generic strategies of differentiation, cost leadership, integrated
• -based on resource matching with CSF
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Generic strategy- cost leadership-

resource implications
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Generic strategy- cost leadership-

• Efficient processes
• Supply chain integration
• Resources enabling economies of scale and scope
• Specialized resources
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Generic strategy- differentiation-

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Generic strategy- differentiation-

• R&D, NPD processes
• Brands, customer focus
• Quality systems
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Integrated cost leadership and

differentiation strategy: implications
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Being perceived as different (Collis and Rukstad,

2008)
(Blue ocean logic)
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Value disciplines
• Operational excellence,
• Customer intimacy,
• Product leadership
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Value disciplines- implications for

resources
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Reason why the firm continues to

operate
• Finding the sweet spot of overlap between the
• customers’ needs and the
• companies capabilities- that the
• competitors do not currently offer
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The stakeholder model

• Group 1: Employees
• Group 2: Customers
• Group 3: The Community
• Group 4: Shareholders
• Group 5: Society
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Implications of stakeholder model for

resources
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Strategic and Capital planning process

• Strategic planning as the vehicle that guides decision
making for all spending
• Resources needed to fulfill both immediate requirements
and anticipated future needs based on the results-oriented
goals and objectives
• Capability of existing resources - performance gap
between current and needed capabilities
• Identifying and evaluating alternative approaches, including
nonphysical capital options such as human capital
• Review and approval framework with established criteria
for selecting capital investments
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The balanced scorecard

• Financial
• Customer
• Internal business process
• Knowledge, learning and capabilities
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Open Innovation / Open strategy

• The primary innovator performs some central
function in the general process and is rewarded
for that work with a patent, license, some kind of
service, or another means of monetizing the
value created. The remaining work is performed
by independent innovation firms that develop their
own products and services around that
technology.
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Open innovation- implication for

resources
• Strategic resources?
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Miles & Snow framework

• Actions of prospectors, defenders, reactors, and
analysers
• Analysers more profitable? Prospectors- more revenue
growth?
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First mover vs second mover- resource

implications
• What capabilities does successful first mover have?
• What capabilities does a successful second mover have?
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Frameworks in corporate strategy

• Ansoff Matrix
• McKinsey’s three horizons of growth: core, emerging and
blue sky business
• Real options
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Ansoff Matrix
• Market penetration
• Market development
• Product development
• Diversification
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Portfolio models
• BCG Matrix
• GE Grid
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McKinsey’s three horizons of growth:

core, emerging and blue sky business
Visualize movement
from 1 to 3, and 2
being the bridge
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Real options
• Firms establish options by making an initial
investment, for example by performing a market test,
creating a joint venture, developing a prototype, or
purchasing an operating license (e.g., in the mining or
telecommunications industries). If the economic
prospects of the project turn out to be favorable, a
firm may later decide to exercise the option—that is,
to launch the new product, to purchase the remaining
capital of the joint venture, to build a plant for the new
technology, or to operate the acquired license.
Conversely, if economic circumstances are
unfavorable, it will abandon the option
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Real options- resource implications

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Value paradox in strategy

How to balance the two broad approaches to creating value
• Create more value for each customer
• Customer specific resources
• Control over resources that can create features
• Resources that can enable a premium to be charged
• Decentralised resources that enables responsiveness
• Create value for more customers
• Resources that are common to many customers
• Centralized resources that enable efficiency and coordination
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Time Paradox in strategy

• What time horizon to focus on?
• How to simultaneously focus on all three time-horizons?
• What does a particular focus mean?
• Past
• Building on existing resources

• Present
• Creating or acquiring new resources to respond to the

changed requirements
• Future
• Investing in resources that may be relevant in the

future
• Creating resources that may shape the future
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How does the time paradox play out in

a particular context
• Automobile companies faced with new emission norms in
2019
• Option to continue with vehicles barely meeting the current norms
• Option to invest in vehicles that will be compliant for years to come
and make fuel choices such as petrol/diesel
• Option to design products such as EVs, hybrids, other clean
options
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Conceptual framework of strategy &

resources
• Value paradox and time paradox play out both at the
business strategy level and the corporate strategy level
• The functional strategy and the resources depend on the
strategic approaches the firms have adopted for business
strategy and corporate strategy

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1

Strategy and resources: an introduction

Quiz on case discussions 10%

Strategic management- current consensus

• What is the common understanding about

Strategic management- current consensus

• Definition, framework, dominant ways of

Questions for strategic theories

Questions for strategic theories

Key issues in strategic

Key issues in strategic

Frameworks in Business strategy

Strategy stated as (beyond vision, mission and

Frameworks in Business strategy

LCAG framework- implications for

Porter’s industry five forces, positioning

Generic strategy- cost leadership-

Generic strategy- cost leadership-

Generic strategy- differentiation-

Generic strategy- differentiation-

Integrated cost leadership and

Being perceived as different (Collis and Rukstad,

Value disciplines- implications for

Reason why the firm continues to

The stakeholder model

Implications of stakeholder model for

Strategic and Capital planning process

The balanced scorecard

Open Innovation / Open strategy

Open innovation- implication for

Miles & Snow framework

First mover vs second mover- resource

Frameworks in corporate strategy

McKinsey’s three horizons of growth:

Real options- resource implications

Value paradox in strategy

Time Paradox in strategy

• Building on existing resources

• Creating or acquiring new resources to respond to the

• Investing in resources that may be relevant in the

How does the time paradox play out in

Conceptual framework of strategy &

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