The Internal

Organization:
Resources, Capabilities,
Core Competencies, and
Competitive Advantages

Hassan Abbas – BS AnF (7)

 Click icon to add picture

Walmart VS Amazon
https://www.youtube.com/watch?v=KRJ
V1SPYpIE

https://www.youtube.com/watch?
v=MiQYQQcG1HQ
 Click icon to add picture

Amazon Smart
Warehouses
https://www.youtube.com/watch?
v=IMPbKVb8y8s
Table of Contents

• Analyzing the Internal Organization

• Resources, Capabilities, and Core Competencies
Competitive Advantage – Driving Factors

• The rate of core competence obsolescence because of environmental

changes
• The availability of substitutes for the core competence
• The imitability of the core competence
Can Do – Might Do

• Can Do - Function of
• Resources
• Capabilities
• Core competencies

• Might Do - Function of
• Opportunities
• Threats
Analyzing the Internal Organization

• The Context of Internal Analysis

• Earlier Scenario
• Labor costs
• Access to financial resources raw materials
• Protected or regulated markets
• Acquisition
• Global mind-set
• Entire Portfolio
Developing Core-Competency
Analyzing the Internal Organization

• Creating Value
• Walmart - “every day low price”
• Low cost
• Differentiated Product
The Challenge of Analyzing the Internal
Organization

• Identifying
• Developing
• Deploying
• Protecting resources
• Capabilities
• Core competencies
Challenges

• New proprietary technologies

• Rapidly changing economic
• Political trends
• Transformations in societal values
• Shifts in customers’ demands
• Judgements
Resources

• Combined to Form Capabilities

• Tangible
• Imitable
• Costly

• Intangible
• Timely
• Unimitable
Tangible Resources
Intangible Resources
Social Media Ad Spend
Advertisement Spend – Medium Wise

• https://aurora.dawn.com/news/1143705
Capabilities

• Combination of Tangible & Intangible Resources

• developing, carrying, and exchanging information and knowledge
through the firm’s human capital
Capabilities
Core Competency

• Combination of Capabilities
• Crown Jewels
• Innovation
Building Core Competency

• Four specific criteria of sustainable competitive advantage

• Value chain analysis
Four Criteria of Sustainable Competitive Advantage

• Valuable
• Rare
• Costly to imitate
• No substitutable
4 Factor Model

• Valuable
• Exploit opportunities or neutralize threats

• Rare
• Costly to Imitate
• unique historical conditions
• organizational culture
• causally ambiguous
• Social complexity

• Nonsubstitutable
Summary – 4 Factor Model
Value Chain Analysis
Value Chain Analysis

• Understand Operation – Create Value or not

• Value greater than Cost
• Cost Position
• Global Context
• Value Chain Activities
• Support Functions
• Value Chain Activites
Value Creation through Value Creating Activities
Supply Chain Management

• Sourcing
• Procurement
• Conversion
• Logistics management
• Raw materials
• Convert them into final products
Operations

• Efficiently change raw materials into finished products.

• Developing employees’ work schedules, designing production
processes and physical layout of the operations’ facilities,
determining production capacity needs, and selecting and
maintaining production equipment
Marketing (Sales)

• Segmentations
• Satisfying customers’ needs
• Retaining customers
• Locating additional customers
• Advertising campaigns, developing and managing product brands,
• Determining appropriate pricing strategies
• Training and supporting a sales force
Distribution

• the final product to the customer.

• Efficiently handling customers’ orders, choosing the optimal
delivery channel, and working with the finance support function to
arrange for customers’ payments for delivered goods
Follow-up

• Increase a product’s value for customers.

• Surveys to receive feedback about the customer’s satisfaction,
• Offering technical support after the sale, and fully complying with
a product’s warranty
Value Creation through Support Activities
Human Resource

• Managing the firm’s human capital.

• Selecting, training, retaining, and compensating human resources
in ways that create a capability and hopefully a core competence
Finance

• Acquiring And Managing Financial Resources.

• Securing Adequate Financial Capital, Investing In Organizational
Functions In Ways That Will Support The Firm’s Efforts To
Produce And Distribute Its Products In The Short And Long Term,
And Managing Relationships With Those Providing Financial
Capital To The Firm
Management Information Systems

• obtain and manage information and knowledge throughout

• the firm.
• Identifying and utilizing sophisticated technologies, determining
optimal ways to collect and distribute knowledge, and linking
relevant information and knowledge to organizational functions
Dabbawala

• https://www.youtube.com/watch?v=fTkGDXRnR9I
• https://www.youtube.com/watch?v=Z4foWqVHqsE
Outsourcing

• Purchase of a value-creating activity or a support function activity

from an external supplier.
• flexibility, mitigate risks, and reduce their capital investments
• Offshoring
• https://www.youtube.com/watch?v=za4VmBB8_F8