1. Chapter 5 Analyzing Resources and Capabilities

2. Chapter objectives
Appreciate the role of a firm’s resources and capabilities as a basis for formulating strategy
Identifying and appraise the resources and capabilities of a firm
Evaluate the potential for a firm’s resources and capabilities to confer sustainable competitive advantage
Use results of resources and capability analysis to formulate strategies that exploit internal strength while defending against internal weaknesses

3. Analysts have tended to define assets too narrowly, identifying only those that can be measured, such as plant and equipment. Yet the intangible assets, such as a particular technology, accumulated consumer information, brand name, reputation, and corporate culture, are invaluable to the firm’s competitive power. In fact, these invisible assets are often the only real source of competitive edge that can be sustained over time.
Hiroyuki Itami, Mobilizing Invisible Assets

4. Basing strategy on resources and capabilities
Strategy is concerned with matching a firm’s resources and capabilities to the opportunities that arise in external environment

6. Canon core competencies
Canon’s products involve three technological capabilities:
Precision mechanics
Microelectronic
Fine optics

7. Kodak
Eastman Kodak’s dominance of the world market for photographic products based on chemical imaging has been threatened by digital imaging

8. You’ve gotta do what you do well.
Licino Noto, Former vice chairman, exxon mobil

9. Resources of the firm Tangible resources Intangible resources
Human resources

11. Brand as an intangible asset

12. Organizational capabilities
firm’s capacity to deploy resources for a desired end result.
Those things that an organization does particularly well relative to its competitors

13. Core competences According to Hamel and Prahalad, are those that:
Make a disproportionate contribution to ultimate customer value, or the efficiency with which that value is delivered and
Provide a basis for entering new markets

14. Approaches to Classifying capabilities
Functional Analysis: identifies capabilities in relation to each of the principal functional areas of the firm
Value-chain Analysis: separates the activities of the firm into sequential chain.

17. Appraising resources and capabilities
Establishing competitive advantage
Scarcity
Relevance
Sustaining competitive advantage
Durability
Transferability
Reliability
Appropriating the returns to competitive advantage

19. When your competitive advantage walks out the door: Gucci