2. Resources & Capabilities
International Business Strategy
LON301BUS
DO NOT ADD FURTHER SLIDES TO THIS PACK
SAVE FILE USING THE FOLLOWING FORMAT: MODULE CODE UNIT NUMBER.PPT (E.G. LCM001U1.PPT)
PLEASE DO NOT CHANGE TEMPLATE OR FORMATTING
Unit: 4 Knowledgecast: 1

3. Module Learning Outcomes
Demonstrate a sound appreciation of current strategic management concepts
Assess current developments in the organisational environment and alternative responses related to strategy
This Knowledgecast focuses on strategic capability, sources of competitive advantage and how businesses can SUSTAIN that competitive advantage.

4. Strategic Capability competences of an organisation needed for
“Strategic capability is the resources and
competences of an organisation needed for
it to survive and prosper.”
(Johnson & Scholes 2008:95)
Spend some time critically discussing this definition. Make reference to the resource based view offering criticism such as Priem & Butler (2001): tautology/lack of specificity.

5. Strategic Capability Four Typical Categories of Resources Physical
Financial
Human
Intellectual
Resources include tangible resources (physical assets) and intangible resources such as information, reputation and knowledge.
Four categories typical: Physical, Financial, Human and Intellectual.
Threshold capabilities are those capabilities essential for the organisation to be able to compete in a given market. For example, an ICT infrastructure which enables e-commerce. Contribute towards competitive advantage. However, CE will be gained if the organisation has distinctive or unique capabilities that competitors cannot imitate the three definitions presented and identify any similarities and differences.

6. Foundations of Strategic Capability
Resources
Competences
Threshold Capabilities
Threshold resources:
Tangible
Intangible
Threshold Competences
Capabilities for Competitive Advantage
Unique resources:
Core Competences
Resources include tangible resources (physical assets) and intangible resources such as information, reputation and knowledge.
Four categories typical: Physical, Financial, Human and Intellectual.
Threshold capabilities are those capabilities essential for the organisation to be able to compete in a given market. For example, an ICT infrastructure which enables e-commerce. Contribute towards competitive advantage. However, CE will be gained if the organisation has distinctive or unique capabilities that competitors cannot imitate
Core competencies are those activities that underpin competitive advantage and are difficult for competitors to imitate or obtain.

7. Cost Efficiency EOS Cost Efficiency Supply Cost
Experience
Cost efficiency is a key strategic capability: reference supplier and customer value.
EOS = Economies of Scale
Design = Product/Process Design
Design

8. Bases for Competitive Advantage
Porter’s 3 Strategy Approach
Price-based Strategy
Differentiation Strategy
Hybrid Strategy
Focused differentiation Strategy
Failure Strategy

9. Capabilities for Sustainable Competitive Advantage
Value
Rarity
Robustness
Non substitutability
Value = valued by customer
Rarity = ownership, transferability, sunk costs
Robustness = Non-inimitability
NS = At product/service level or at elemental level

10. Knowledgecast Summary
Demonstrate a sound appreciation of current strategic management concepts
Cost efficiency is potentially a source of strategic capability for both private, public and third sectors.
Assess current developments in the organisational environment and alternative responses related to strategy
What role do the differing management functions play in sustaining competitive advantage?
MAXIMUM THREE LEARNING OUTCOMES TO REVIEW: ONE REVIEW SUB BULLET PER LEARNING OUTCOME

12. Seminar Journal Review: Kumar, N. (2006) “Strategies to Fight Low Cost
Rivals”, British Journal of Marketing
In preparation for this seminar, please ensure you have read Kumar’s
article and prepared answers to the following questions for discussion
in the session.
Q1. Identify the challenges existing businesses face from Low Cost Rivals (LCR)
Q2. How should existing businesses develop their strategy to respond to LCR?
Q3. Consider the formation of the strategy and identify the two options that Kumar recommends?
Q4. Can you suggest any alternative options?

13. Group Activity Assessment Preparation – Rehearsal
You will have an opportunity to use this time to rehearse
your presentation regarding the business environment of
your case study organisation, which will be invaluable in
preparing you for the first assessment. Ensure each
member of the group understands and accepts their role
and responsibilities.