Table of Contents Introduction: 2 PART A: Chapter Summary 3 PART B: Background and Case summary 5 EBay’s Background 5 Case Summary: Making eBay work 6 PART C: Case Questions 7 Case Question #1: 7 Case Question #2: 10 Case Question #3 10 PART D: Implications and Recommendation 12 Implications 12 Recommendations 13 Introduction: Strategic capabilities have become a source of competitive advantage for both small and large organization. Organizations that wish to survive and compete in today’s dynamic business world need to implement unique and high-value strategic capabilities. This paper takes you through in depth analysis of strategic capabilities and how it relates to the business environment. The …show more content…
Organizations must utilize their resources by being competent. Competences in business policy are used to mean the activities and processes through which an organization deploys it resources effectively. Competences can either be threshold or core. Threshold competences are the essentials needed to compete in a given market, while core competences are the effective use of resources to gain competitive advantage. Importance of cost-efficiency: The management of cost-base of an organization can be a basis of achieving competitive advantage. Cost efficiency is driven by a number of cost drivers. [pic] How strategic capabilities can lead to sustainable competitive advantage: • Value: Have resources that customers value in terms of products and services. Product or services must exceed consumer want and taste. • Rarity: Having unique resources and competences in terms of personnel intellect, unique services rendered among other things. • Robustness: A strong and well-built form of strategic capabilities that cannot be imitated by competitors. • Non-substitutability: Providing value to customers and possessing competences that are complex and casually ambiguous. Diagnosing Strategic Capability If organizations are to achieve competitive advantage by delivering value to customers, they need to understand how it is created. • Value Chain: describes the activities within and
Cost has traditionally being a major influence on all business as all businesses desire to achieve maximum efficiency as it is a vital factor for businesses in order to reach the ultimate goal and success. Businesses sees cost as the key value to success and aims to become as much cost efficient as possible, by implementing a cost-leadership style approach to the operations variable cost or fixed cost ,while maintain the expected profit margin, business is able to gain a competitive advantage over their competitors in their target market. This is called cost-based competition. By determining the break-even point and applying cost saving strategies, to reducing cost, businesses who apply cost-based competition in their operations is able to maximize the profits and lead business to success.
Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources.
Some of these strengths include great core values, their human and social capital, they carry a wide variety of products that have a strong brand name, and their expansion through global expansion and investment.
This would include human abilities, process capabilities, financial resources, products and services, customer goodwill and brand loyalty.
He suggested that sustained competitive advantage derives from the resources and capabilities a firm controls that are valuable, rare, imperfectly imitable, and not substitutable. He further added that the resources and capabilities can be viewed in form of tangible and intangible assets. There are four different categories of resources financial, physical, human, and organization.
| Valuable resources which are also rare convey a competitive advantage, but its relative permanence is not assured. The
Strengths include highly innovative product (main competitive advantages over debeaking arriving into savings from reduced cannibalization, trauma
A company’s strengths are found within their own company and members. Depending on how well and to what extent a company uses its resources determines just what its strengths are. These strengths may be what they do better than other companies, what they do different from other
For a business to be successful and have a competitive advantage, it is important to evaluate the company’s resources and capabilities (Pitt & Koufopoulos, 2012). Resources in a company are the productive assets owned (tangible or intangible) whereas capabilities are what the company can do with this (Grant, 2010). “Establishing competitive
Service firms are increasingly using customer service to develop sustainable competitive advantage – through value generation as well as differentiation. This
A company’s resources include two types: tangible and intangible. The former is asset that can be observed and counted, such as, office furniture, production equipment, computer, and warehouse, etc. Unlikely, the intangible resources are assets that are rooted deeply in the company’s history, accumulate over time, and are relatively difficult for competitors to learn and copy, such as brand, intellectual property and reputation, etc.
According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished
What is essential to point out is that there is a progressive relationship between these four attributes. First of all, that a resource is valuable is enable firms to survive; secondly, when the resource is rare, it will provide a short-run competitive advantage for the firm; however, if the resource is easily imitated, the advantages will disappear. Therefore the inimitable one is considerately significant; finally, there is no substitute for such a resource. Only when these four attributes are
Rarity – Whether the firm has valuable resource or capabilities that is extremely unique among the set of its competitors.
Capabilities mean how the company mixes and utilizes all assets to bring the best product offered. These capabilities summarize in company 4Ps, which are listed as below: