5. STRATEGIC CAPABILITY

    Cards (53)

    • Strategic capability
      An organisation's ability to survive and prosper depends on its strategic
      capability; this can be defined as the adequacy and suitability of its resources and competences.
    • Resources and competences
      Unique and core
    • Threshold competences
      Those activities and processes needed to meet the customer's minimum requirements.
    • Threshold resources
      Those resources needed to meet the customer's minimum requirements. Resources can be tangible or intangible
    • Core competences
      The activities and processes through which resources are deployed in
      such a way as to achieve competitive advantage in ways that others cannot imitate or obtain.
    • Unique resources
      Those resources that critically underpin competitive advantage and that others cannot easily imitate or obtain. Resources can be tangible or intangible
    • Competitive advantage
      The ability of an organisation to generate greater returns than those
      of competitors over the long term, as opposed to short-term tactics which provide a temporary advantage.
    • resources and competences must have four qualities
      • Value
      • Rarity
      • Inimitability
      • Organisational support
    • Value
      the value placed on resources and competences by a customer or
      organisation. It is the extent to which resources or competences allow a customer or organisation to take advantage of opportunities, and/or neutralise threats. No matter how rare a resource or how well-developed a competence is, it cannot create competitive advantage if customers do not value it or the things it enables the organisation to do.
    • Rarity
      A single unique resource or core competence may have the potential to create competitive advantage by itself. The importance of rarity is that if a resource or competence is generally available (ie not rare) then an organisation's competitors will have access to it in the same way as the organisation does. In which case, the resource or competence does not confer any advantage to the organisation compared with its rivals.
    • Inimitability
      that a resource is difficult for competitors to imitate. They point out that, generally, it is difficult to base competitive advantage simply on possession of tangible resources, since they can often be imitated or bought in. Inimitability most frequently resides in the competences involved in linking activities and processes in ways that both satisfy customer priorities and which are difficult for competitors to imitate.
    • Organisational support
      focuses upon whether or not an organisation is able to support its
      capabilities, including its processes and systems. For example, an organisation may have a unique and valuable patent, but is not able to exploit it because it does not have the sales force to sell the resulting product.
    • Dynamic capabilities
      An organisation's abilities to develop and change competences to meet the needs of rapidly changing environments.'
    • Organisational knowledge
      theory of the learning organisation and founded on the idea that knowledge can be a major factor in creating a sustainable competitive advantage and should form part of an organisation's strategic capability. Knowledge is thus seen as an important resource and may in itself constitute a competence: it can certainly underpin
      many competences.
    • Organisational learning
      important as business environments becomes increasingly complex and dynamic. It becomes necessary for strategic managers to promote and foster a culture that values intuition, discussion of conflicting views and experimentation. A willingness to back ideas that are not guaranteed to succeed is another aspect of this culture:
      there must be freedom to make mistakes.
    • Knowledge management
      important in helping organisations sustain competitive advantage. The aim of knowledge management is to exploit existing knowledge and to create new knowledge so that it may be exploited in turn. Tacit knowledge is the term used by Nonaka and Takeuchi (1995) to describe the knowledge locked in the minds of individuals. Even when it is made explicit, by being recorded in some way, it may be difficult and time consuming to get at, as is the case with most paper archives.
    • Knowledge management technology
      • Office automation systems
      • Groupware,
      • intranet
      • expert system
      • Data warehouses
      • data mining
    • Office automation systems
      IT applications that improve productivity in an office. These include word processing and voice messaging systems.
    • Groupware,
      IBM Notes provides functions for collaborative work groups. In a sales
      context, for instance, it would provide a facility for recording and retrieving all the information relevant to individual customers. This detail could then be updated and made available to anyone working in the sales department.
    • intranet
      an internal network used to share information using internet technology and protocols.
    • expert system
      computer program that captures human expertise in a limited domain of knowledge. For example, many financial institutions now use expert systems to process straightforward loan applications by applying judgements based on the details input.
    • Data warehouses
      used to store vast amounts of operational data in accessible form.
      Analytical and query software can then be used so that reports can be produced at any level of summarisation and incorporate any comparisons or relationships desired
    • data mining
      True data mining software discovers previously unknown relationships and provides insights that cannot be obtained through ordinary summary reports.
    • Porter's 4 value chain
      useful framework for assessing the strategic capabilities of an organisation as it offers an overview of an organisation and what it does, and how its activities (processes) add value to the end customer
    • Porter's 4 value chain
    • Value activities
      The means by which a firm creates value in its products
    • Components of the value chain

      The margin is the excess the customer is prepared to pay over the cost to the firm of obtaining resource inputs and providing value activities. It represents the value created by the value activities themselves and by the management of the linkages between them.
    • primary activities
      predominantly involved in the production of goods, and support activities provide necessary assistance. Linkages are the relationships between activities. directly related to production, sales, marketing, delivery and service
    • Primary activities
      • Inbound logistics
      • Operations
      • Outbound logistics
      • Marketing and sales
      • After-sales service
    • Inbound logistics

      Receiving, handling and storing inputs to the production system: warehousing, transport, inventory control and so on
    • Operations
      Converting resource inputs into a final product: resource inputs are not
      only materials. People are a resource, especially in service industries.
    • Outbound logistics
      Storing the product and its distribution to customers: packaging, testing, delivery and so on. For service industries, this activity may be more concerned with bringing customers to the place where the service is available; an example would be front of house management in a theatre.
    • Marketing and sales
      Informing customers about the product, persuading them to buy it, and
      enabling them to do so: advertising, promotion and so on
    • After-sales service
      Installing products, repairing them, upgrading them, providing spare parts and so forth
    • Support activities
      provide purchased inputs, human resources, technology and infrastructural functions to support the primary activities. It may seem an obvious point that support activities need to support the primary activities, but do not overlook it.
    • Support activities
      • Procurement
      • Technology development
      • Human resource management
      • Firm infrastructure
    • Procurement
      All of the processes involved in acquiring the resource inputs to the primary activities (eg purchase of materials, subcomponents, equipment)
    • Technology development
      Product design, improving processes and resource utilisation
    • Human resource management
      Recruiting, training, managing, developing and rewarding people; this
      activity takes place in all parts of the organisation, not just in the HRM
      department
    • Firm infrastructure
      Planning, finance, quality control, the structures and routines that make up the organisation's culture