4-1© 2006 by Nelson, a division of Thomson Canada Limited. The Internal Environment: Resources,...
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4-1 © 2006 by Nelson, a division of Thomson Canada Limited. The Internal Environment: Resources, Capabilities, and Core Competencies Chapter Four
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Transcript of 4-1© 2006 by Nelson, a division of Thomson Canada Limited. The Internal Environment: Resources,...
4-1© 2006 by Nelson, a division of Thomson Canada Limited.
The Internal Environment: Resources, Capabilities, and
Core Competencies
Chapter Four
4-2© 2006 by Nelson, a division of Thomson Canada Limited.
Resources, Capabilities & Core Competencies
4-3© 2006 by Nelson, a division of Thomson Canada Limited.
Resources, Capabilities & Core Competencies
4-4© 2006 by Nelson, a division of Thomson Canada Limited.
Core Competencies For a strategic capability to be a Core Competency, it must be:
OOrganizedrganized toto be be
ExploitedExploited
The firm must be organized appropriately to obtain full benefits of the resources in order to realize a competitive advantage.
RRareare Possessed by few, if any, current and potential competitors.
VValuablealuable Allow a firm to neutralize threats or exploit opportunities in its external environment.
Costly toCostly to
IImitatemitateWhen other firms either cannot obtain them or must obtain them at a much higher cost.
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4-5© 2006 by Nelson, a division of Thomson Canada Limited.
Primary Activities
Outsourcing Strategic choice to purchase some activities from outside suppliers
SupportActivities
Inb
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nd
In
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Lo
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tics
Op
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Mar
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M
arke
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& S
ales
& S
ales
ProcurementProcurement
Technological DevelopmentTechnological Development
Human Resource ManagementHuman Resource Management
Firm InfrastructureFirm Infrastructure
Ser
vice
Ser
vice
MARGIN
MARGIN
MARGIN
MARGIN
Firms often buy a portion of their value-creating activities from specialty external suppliers who can perform these functions more efficiently.
4-6© 2006 by Nelson, a division of Thomson Canada Limited.
Never take for granted that core competencies will continue to provide a source of competitive advantage.
All core competencies have the potential to become Core Rigidities.
Core Rigidities
They are former core competencies that sow the seeds of organizational inertia.
Prevent the firm from responding appropriately to changes in the external environment.
Core Competencies--Cautions and Reminders
