Knut Haanæs1 Session 4: Internal analysis of resources and competencies Knut Haanæs Associate Professor Norwegian School of Management - BI

Knut Haanæs2 Internal analysis of resources and competencies Wachtell, Lipton case McKinsey as a knowledge intensive firm - a discussion Value creation in shops and resources Guest lecturer: Hugo Maurstad, partner

Knut Haanæs3 Questions for Wactell, Lipton case How does Wachtell, Lipton create value? What are their critical competencies? Do they have a strategy? -- In case they do: what characterizes their strategy?

Knut Haanæs4 Internal analysis of resources and competencies Wachtell, Lipton case McKinsey as a knowledge intensive firm - a discussion Value creation in shops and resources Guest lecturer: Hugo Maurstad, partner

Knut Haanæs5 The third value configuration Source: Porter (1985); Stabell and Fjeldstad (1997) The value chain The value shop The value network

Knut Haanæs6 Stabell and Fjeldstad (1997) Value shop The value shop SOLVE PROBLEMS * Solving unique problems * Different disciplines * No line; circle * Mostly primary activities * Reputation driven * Referrals and sub-contracting * Learning * Leveraging expertise

Knut Haanæs7 Activities in value shop Stabell and Fjeldstad (1997) Solving unique problems! Purchasing Technology development Recruiting and competence development Administration PROBLEM- SOLUTION PROBLEM IDENTIFICATION CONTROL/ EVALUATION DOING CHOICE Consulting, Hospital, School, etc.

Knut Haanæs8 Sorce: Stabell and Fjeldstad (1998) 3 types of problem solving Diagnosis Search Design

Knut Haanæs9 Key aspects of strategy in value shops

Knut Haanæs10 Firm-specific resources RESOURCES Intangible resources Tangible resources Competence-based Relationship-based STRUCTURAL CAPITAL Controlled by organization HUMAN CAPITAL Controlled by individuals Reputation Loyalty Relations Image Loyalty Relations Knowledge Skills Aptitudes Info. bases Routines Culture Physical Financial Property-rights Source: Haanes and Løwendahl (1997) Intellectual capital

Knut Haanæs11 Competence Knowledge Skills Competence (“To know something that can be used to do something”)

Knut Haanæs12 NOT IMITABLE? SCARCE? VALUE? 3 criteria for sustained competitive advantage Source: Barney (1991)

Knut Haanæs13 MOBILIZED? VALUE? SCARCE? NOT IMITABLE? APROPRIATED? 2 strategic challenges

Knut Haanæs14 Core competencies Can give access to new markets Lead to perceived advantages for customers Integration of knowledge and skills Limited number (5-15) Take time to develop / built through doing Difficult to understand / socially complex

Knut Haanæs15 Value creationCompetenceRelations Chain Shop Network Efficiency Scale Quality Flow Quality Reliability Problem solving New combinations Mobilize competencies Reputation Referrals Sub-contracting Contracting Segmenting Communicating Many relations to many customers Many co-operative / competitive partners Value creation and resources

Knut Haanæs16 Internal analysis of resources and competencies Wachtell, Lipton case McKinsey as a knowledge intensive firm - a discussion Value creation in shops and resources Guest lecturer: Hugo Maurstad, partner