Miles A. Zachary MGT 4380. Discuss Exam 1 Lecture RBT Intellectual Property Value Chain Alternative...
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Transcript of Miles A. Zachary MGT 4380. Discuss Exam 1 Lecture RBT Intellectual Property Value Chain Alternative...
Miles A. Zachary
MGT 4380
Managing Firm ResourcesChapter 4
Discuss Exam 1Lecture
RBTIntellectual PropertyValue ChainAlternative Theories in StrategySWOT Analysis
SWOT ExerciseSimulation
Overview
Resource-based theory (RBT) suggests that firms that possess strategic resources have a greater chance of developing a competitive advantage over competitors and in turn, higher profitability
A strategic resources is an asset that is:Difficult to imitateRareValuableNon-substitutable
Resource-Based Theory
Be DRVN
Difficult to imitate-competitors have a hard time duplicating the resource
Rare-the resource is difficult to cultivate or find in the industry
Valuable-a resource that helps a firm create strategies that capitalize on opportunities and ward off threats
Non-substitutable-competitors are unable to find an alternative way to enjoy the benefits provided by a particular resource
Resource-Based Theory
Additionally, some firms are able to bundle strategic and non-strategic (generic) resources together
Firms able to combine multiple resources are often able to create a unique business model that puts the firm far ahead of its competitors
Ex. Southwest Airlines: Combined their unique corporate culture (a strategic resource) with other generic (yet valuable) resources such as direct flights, low fares, one-plane fleet, and unique passenger boarding to create an effective and efficient competitive advantage
Resource-Based Theory
Firms in possession of strategic resources that meet the four criteria of RBT are often in a position to gain a sustained competitive advantage
A sustained competitive advantage is one that will endure over time and will help the firm remain successful well into the future
While anyone of the qualities is good, possessing a resources with fewer than all four will likely lead to only a temporary advantage
On occasion, the external environment can turn a generic resource into a strategic resource
Resource-Based Theory
Resources are goods and services owned by an organizationTangible Resources-resources readily seen,
touched, and quantified; often physical objects or placesEg., a firm’s property, plant, and equipment, cash
Intangible Resources-resources difficult to see, touch, or be quantifiedEg., knowledge and skills, organizational culture,
firm reputation
Resources
Capabilities refer to the firm’s ability to bundle, manage, or otherwise exploit resources such that value is added and a competitive advantage results
More generally, capabilities are what a firm can do with their resources
Capabilities tend to arise over timeDynamic capabilities are the ability to create new
and better capabilitiesAdaptive firms use dynamic capabilities to stay up or
ahead of the every-changing environmentEx. Coca-Cola-has a knack for being an excellent
brand builder
Capabilities
While resources and capabilities are determinants of firm performance, customers must often be convinced to purchase the resulting goods and services
The marketing mix (or 4 Ps) helps firms do that by providing a strong alignment among:Product-what a firm sellsPrice-what it sells it forPlace-where it sells itPromotion-how a firm communicates these
things
Marketing Mix
Intellectual property refers to creations of the mind (e.g., inventions, artistic products, symbols, etc.)
Four main types of intellectual property include:PatentsTrademarksCopyrightsTrade Secrets
Intellectual property resources are strategic resources when they fit the RBT criteria
Even IP resources that have only some of the RBT criteria can be bundled with other resources
Can be protected by formal and/or informal methods
Intellectual Property
Patents-legal decrees that protect inventions from direct imitation for a limited period of timeDifficult to get; must be new, non-obvious, and
usefulPatents are core advantages in many industries
Trademarks-protected phrases, pictures, names, or symbols used to identify an organizationHelp an organization stand out and build an
identity in the marketplaceOther firms use trademarks to carve out niche
positions
Intellectual Property
Copyrights-provide exclusive rights to the creators of artistic works (e.g., books, movies, songs, etc.)Pirated material violates copyright material
Trade Secrets-formulas, practices, and designs that are central to a firm’s business, but remain unknown to competitorsEx.-KFC’s secret spice blend, the formula for
WD-40, the recipe for Coca-ColaThe copying of trade secrets is legally
protected; however, once a secret is revealed, it is legally a secret no longer
Intellectual Property
Patent
Copyright
Trade Secret
Trademark
The value chain charts the path by which products and services are created and eventually sold to customers; firm specific
Organizations need to consider their resources and capabilities alongside the value chain when formulating and implementing strategies
Composed of two sets of activitiesPrimary ActivitiesSecondary Activities
Value Chain
A supply chain is a system of people, activities, information, and resources involved in creating a product and moving it to the customer
The supply chain is a broader concept that captures the entire process of creating and distributing a product, often times across different firms
Supply Chain
Best value supply chains combine the concept of the supply chain with the considerations of the value-creation process within a firm
Like other multi-metric performance assessments, BVSCs focus on total value added, specifically to customers
Four components:Strategic supply chain managementAgilityAdaptabilityAlignment
Best Value Supply Chains
Using a supply chain to create competitive advantages and enhance performance
Strategic SC use is measured by:Speed-time from initiation to completion of the
production and distribution processQuality-relative reliability of SC processesCost-enhance value by reducing expensesFlexibility-refers to the responsiveness of the
supply chain to changes in customer needs
Strategic Supply Chain Management
The supply chain’s relative capacity to act rapidly in response to changes in supply and demand
Agility can be achieved by using buffersExcess capacityTechnical information systems
Co-locating with customers can provided important face-to-face interaction
Agility
Adaptability is the willingness and capacity to reshape supply chains when necessary
While one supply chain is desired since it is cost effective, it is not always the best value solution
Having a variety of options increases adaptability
Adaptability
Alignment refers to creating consistency in the interests of all participants in a supply chain
When situations arise that pit the interests of one party and the whole supply chain against each other, conflict ensues
Maintaining alignment is necessary to keep the supply chain operating with maximum efficiency
Carefully writing incentives, collaborating on forecasting, and meeting with participants can improve supply chain alignment
Alignment
Enactment-firms can create and manipulate their own environment through outstanding strategy
Environmental determinism-a firm’s environment is a dominating force that determines the fate of the organization
Institutional theory-suggests that firms are bound by social pressures that result in imitation of strategies
Transaction cost economics-firms determine whether to make or buy the products/services they need based on transaction costs
Alternative Theories on Firm Performance
SWOT analysis is a simple tool firms can use to evaluate their internal strengths and weaknesses and external opportunities and threats when determining strategic decisions
Internal and external factors should not be confused with each other
Opportunities should not be confused with strategic moves to capitalize on opportunities
The simplicity of the analysis suggests that it should not be over-evaluated
SWOT Analysis
Simple SWOT Matrix
SWOT-TOW Matrix