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Terms in this set (22)
Unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost.
the organizational and managerial skills necessary to orchestrate a diverse set of resources and to deploy them strategically. Intangible.
enable firms to add value by transforming inputs into goods and services.
provides a model that systematically aids in identifying core competencies. Defines resources broadly to include all assets that a firm can draw upon when formulating and implementing strategy.
Two assumptions are critical in the resource-based model
1) resource heterogeneity 2) resource immobility
assumption that a firm is a bundle of resources and capabilities that differ across firms.
Assumption that a firm has resources that tend to be "sticky" and that do not move easily from firm to firm.
explains and predicts firm-level competitive advantage. (V)alue, (R)are, costly to (I)mitate, and must (O)rganize to capture the value of the resources.
if resource allows the firm to take advantage of an external opportunity and/or neutralize an external threat.
Organized to capture value
the characteristic of having in place an effective organizational structure and coordinating systems to fully exploit the competitive potential of the firm's resources and capabilities.
internal activities a firm engages in when transforming inputs into outputs.
activities that add value directly by transforming inputs into outputs as the firm moves a product horizontally along the internal value chain.
activities that add value indirectly
Strategic Activity System
the conceptualization of a firm as a network of interconnected activities
Dynamic Capabilities perspective
a model that emphasizes a firm's ability to modify and leverage its resource base in a way that enable it to gain and sustain competitive advantage in a constantly changing environment.
firms current level of intangible resources.
firms level of investments to maintain or build a resource.
How to protect competitive advantage
1) better expectations of future resource value (luck)
2) path dependence
3) causal ambiguity
4) social complexity
situation in which the options one faces in the current situation are limited by decisions made in the past.
situation in which the cause and effect of a phenomenon are not readily apparent
situation in which different social and business systems interact with one another.
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