1. Business Policy & Corporate Strategy PGDSM 2011-12 Sapan Shrimal 1PGDSM 2011-12

2. Strategic Capabilities Resources ◦ Tangible and Intangible ◦ Physical, Financial, HR, Intellectual ◦ Threshold and Core / unique Competencies ◦ Threshold and Core / unique Core Rigidity 2PGDOM 2011-12

3. Cost Efficiency Experience Economies of Scale Process / design Input costs 3PGDOM 2011-12

4. Sustainability of Resources Value to customers Lead to high performance Rarity / difficult to obtain or develop ◦ Transferability ◦ Preferred access ◦ Situation dependent ◦ Sunk cost advantage Non-substitutable ◦ Product / service substitution 4PGDOM 2011-12

5. Sustainability of Competencies Value to customers Lead to high performance Robustness / difficult to imitate ◦ Complexity of activities & processes  Within Org  Between org and other stakeholders ◦ Culture & History ◦ Causal Ambiguity  Competency nature  Competency linkage ◦ Non-substitutable  Product / service substitution  Competency substitution 5PGDOM 2011-12

6. Other Areas Dynamic capabilities – organisation’s ability to develop and change competencies to meet changing needs. Organisational Knowledge ◦ Trade off - Formal / Informal ◦ Trade off – codified / rigidity / danger of imitation 6PGDOM 2011-12

7. Examining Strategic Capabilities Value Chain Value Network 7PGDOM 2011-12

8. Value Chain Primary Activities ◦ Inbound logistics ◦ Operations ◦ Outbound logistics ◦ Marketing & Sales ◦ Services Support Activities ◦ Firm Infrastructure ◦ HRM ◦ Technology ◦ Procurement Activity is categorized based on what it results (e.g. a restaurant’s cost of land is to be divided into operations and marketing, based on the purpose of location, in which land is bought) Find out the operating cost, asset value and value creation by each activity. 8PGDOM 2011-12

9. Value Network Value Chains ◦ Supplier value chains ◦ Organisation’s value chain ◦ Channel value chains ◦ Customer value chains Value of activity in network ◦ Overall value add ◦ Cost ◦ Importance in reference to strategic capability ◦ Profitability Decisions ◦ Make or buy ◦ Best partners ◦ Mode of make / buy 9PGDOM 2011-12

10. Questions? 10PGDOM 2011-12