HOLA!!!

01102013…today’s date was a very special day for my classmate, Hadi. It was his birthday, the day he was born in this challenging world. May Allah bless him always and be a good Muslim~

hepy besday HADI!!!

As for today, we had learn about “Evaluating a company’s resources, capabilities, and competitiveness”. Miss ummi started the lecture by asking some question…I couldn’t remember about it but if I’m not mistaken, she asked about what makes McDonalds differ from others…do you know what it is?...let me tell you…it is because of their standard quality of burgers.

Actually, I want to share something interesting that I found in strategic management’s text book while in the middle of searching an idea to write for this post.

“Only firms who are able to continually build new strategic assets faster and cheaper than their competitors will earn superior returns over the long term.” (C. C. Markides and P. J. Williamson - London Business School Professors and Consultants)

Now, let’s move on to our topic. This chapter was related to SWOT analysis. As a whole, we have learned how to evaluate how well a company’s strategy is working. In other words, this topic discuss about the techniques for evaluating a company’s internal situation, including its collection of resources and capabilities and the activities it performs along its value chain.

In this chapter, there are five analytical tools - resource and capability analysis, SWOT analysis, value chain analysis, benchmarking, and competitive strength assessment will be used. All these five analyses are valuable techniques for revealing a company’s competitiveness and for helping company managers match their strategy to the company’s own particular circumstances. 

Resource and capability analysis – a powerful tool for sizing up a company’s competitive assets and determining if they can support a sustainable competitive advantage over market rivals.

SWOT analysis – a simple but powerful tool for sizing up a company’s strengths and weaknesses, its market opportunities, and the external threats to its future well-being.

Value chain analysis – a company’s value chain identifies the primary activities and related support activities that create customer value.

Benchmarking – an effective tool for improving a company’s own internal activities that is based on learning how other companies perform them and borrowing their “best practices”. 

Competitive strength assessment – scores pinpoint its strengths and weaknesses against rivals and point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive vulnerabilities.

Apart from that, we also have learned about VRIN test. It can determine if a resource is a source of sustainable competitive advantage. To serve as a basis for sustainable competitive advantage, resources must be –

·         

      Valuable – meaning that they must be a source of greater value, in terms of relative costs and benefits, than similar resources in competing firms.

·         Rare – rareness implies that the resource must be rare in the sense that it is scarce relative to demand for its use or what it produces.

·                   Inimitable – it is difficult to imitate.

·         Non-substitutable – other different types of resources cannot be functional substitutes.

The criteria of the VRIN clearly rules out best practices as a source of competitive advantage. If other firms can easily understand and copy a capability, it is not a source of advantage.

That’s all from me. I’m sorry for my inconvenient. See u later in the next post…jzkk. PEACE NO WAR!!!