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Chapter Four
Inputs
Environment Strat. Intent
Chapter 4 Strat. Mission Management .
Internal
Environment Process
Strategy Formulation Strategy Implementation
Strategic Actions
Knowledge Objectives:
1. Explain the need for firms to study &
understand their internal environment.
2. Define value & discuss its importance.
3. Describe the differences between tangible &
intangible resources.
4. Define capabilities & discuss how they are
developed.
Strategic
Core Competitiveness
Competencies
Discovering
Core Above-Average
Sources of Returns
Competitive Competencies
Advantage
Criteria of Value
Capabilities
Sustainable Chain
Teams of Advantages Analysis
Resources
Capabilities
Teams of
Resources
Resources
* Tangible
* Intangible
Core
Competencies
Discovering
Sources of Core
Competitive Competencies
Advantage
Capabilities
Teams of
Resources
Resources
* Tangible
* Intangible
Core
Competencies
Discovering
Sources of Core
Competitive Competencies
Advantage
Capabilities Criteria of
Sustainable
Teams of
Resources Advantages
Capability
A non-strategic team
of resources
2006 by Nelson, a division of Thomson Canada
4-25
The VRIO Framework
Costly to Org. to be Competitive Performance
Valuable
Valuable Rare
Imitate Exploited Consequences Implications
Below
Competitive Average
NO NO NO NO Disadvantage Returns
Competitive Average
YES NO NO YES Parity Returns
Temporary Avg./Above
YES YES NO YES Competitive Average
Advantage Returns
Sustainable Above
YES YES YES YES Competitive Average
Advantage Returns
Core
Competencies
Discovering
Sources of Core
Competitive Competencies
Advantage
Service
Operations
Logistics
Outbound
Marketing
Logistics
Inbound
& Sales
IN
RG
A
M
Primary Activities
Service
Operations
Outbound
Marketing
Logistics
Logistics
Inbound
& Sales
IN
RG
A
M
Service
Operations
Outbound
Marketing
Logistics
Logistics
Inbound
Service
& Sales
IN
G
AR
Outbound
Inbound Operations Logistics Marketing
Logistics & Sales M
Service
Operations
Outbound
Marketing
Logistics
Logistics
Inbound
Service
& Sales
IN
G
AR
Outbound
Inbound Operations Logistics Marketing
Logistics & Sales M
Strategic
Core Competitiveness
Competencies
Discovering
Core Above-Average
Sources of Returns
Competitive Competencies
Advantage