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Chapter 4 -- Internal Analysis: Resources, Capabilities, Competencies, and Competitive Advantage: 

Chapter 4 -- Internal Analysis: Resources, Capabilities, Competencies, and Competitive Advantage Text by Charles W. L. Hill Gareth R. Jones Multimedia Slides by Milton M. Pressley Univ. of New Orleans

Preview: 

Preview Competitive Advantage Generic Building Blocks of Competitive Advantage Business Functions and the Value Chain Distinctive Competencies, Resources, and Capabilities Durability of Competitive Advantage Why Do Companies Fail? Avoiding Failure and Sustaining Competitive Advantage

Competitive Advantage: Value Creation, Low Cost, and Differentiation: 

Competitive Advantage: Value Creation, Low Cost, and Differentiation Competitive Advantage Sustained Competitive Advantage

Figure 4.1: PC Firms: Return on Capital Employed Relative to Industry Means: 

Figure 4.1: PC Firms: Return on Capital Employed Relative to Industry Means 1994

Figure 4.2: Value Creation: 

Figure 4.2: Value Creation V P C C P-C V-P V=Value to Consumer P=Price C=Costs of Production V-P=Consumer Surplus P-C=Profit Margin

Figure 4.3: Generic Building Blocks of Competitive Advantage : 

Figure 4.3: Generic Building Blocks of Competitive Advantage Competitive Advantage: Low Cost Differentiation Superior Efficiency

Figure 4.3: Generic Building Blocks of Competitive Advantage : 

Figure 4.3: Generic Building Blocks of Competitive Advantage Superior Quality Competitive Advantage: Low Cost Differentiation Superior Efficiency

Figure 4.4: The Impact of Quality on Profits: 

Figure 4.4: The Impact of Quality on Profits Increased Reliability Increased Quality Increased Productivity

Figure 4.4: The Impact of Quality on Profits: 

Figure 4.4: The Impact of Quality on Profits Increased Reliability Higher Prices Increased Quality Increased Productivity Lower Costs

Figure 4.4: The Impact of Quality on Profits: 

Figure 4.4: The Impact of Quality on Profits Increased Reliability Higher Prices Increased Quality Higher Profits Increased Productivity Lower Costs

Figure 4.3: Generic Building Blocks of Competitive Advantage (Continued) : 

Figure 4.3: Generic Building Blocks of Competitive Advantage (Continued) Superior Quality Competitive Advantage: Low Cost Differentiation Superior Innovation Superior Efficiency

Figure 4.3: Generic Building Blocks of Competitive Advantage (Continued) : 

Figure 4.3: Generic Building Blocks of Competitive Advantage (Continued) Superior Quality Competitive Advantage: Low Cost Differentiation Superior Innovation Superior Efficiency Superior Customer Responsiveness

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices: 

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices Lower Unit Costs Efficiency

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices: 

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices Lower Unit Costs Higher Unit Prices Quality Efficiency

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices: 

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices Lower Unit Costs Higher Unit Prices Customer Responsiveness Quality Efficiency

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices: 

Figure 4.5: Summary of the Impact of Efficiency, Quality, Innovation, and Customer Responsiveness on Unit Costs and Prices Innovation Lower Unit Costs Higher Unit Prices Customer Responsiveness Quality Efficiency

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Inputs Outputs Primary Activities Research and Development

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Inputs Outputs Produc- tion Primary Activities Research and Development

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Inputs Outputs Produc- tion Marketing and Sales Primary Activities Research and Development

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Inputs Outputs Produc- tion Marketing and Sales Service Primary Activities Research and Development

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Materials Management Inputs Outputs Produc- tion Marketing and Sales Service Primary Activities Research and Development Support Activities

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Business Functions, The Value Chain, and Value Creation Human Resources Materials Management Inputs Outputs Produc- tion Marketing and Sales Service Primary Activities Research and Development Support Activities

Figure 4.6: The Value Chain: 

Figure 4.6: The Value Chain Inputs Outputs Produc- tion Marketing and Sales Service Primary Activities Research and Development Support Activities Company Infra-Structure Human Resources Materials Management Business Functions, The Value Chain, and Value Creation

Business Functions, The Value Chain, and Value Creation: 

Business Functions, The Value Chain, and Value Creation Cross Functional Goals* * More Detail in Chapter 11 Corporate Headquarters Staff CEO

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Distinctive Competencies Distinctive Competencies, Resources, and Capabilities

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Resources Distinctive Competencies Distinctive Competencies, Resources, and Capabilities

Slide 27: 

Tangible Land Buildings Plant Equipment Intangible Brand Names Reputation Patents Technical or Marketing Know-How Distinctive Competencies, Resources, and Capabilities Resources Are:

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Resources Distinctive Competencies Capabilities Distinctive Competencies, Resources, and Capabilities

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Resources Distinctive Competencies Capabilities Superior Efficiency Quality Innovation Customer Respon- siveness Distinctive Competencies, Resources, and Capabilities

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Distinctive Competencies, Resources, and Capabilities Resources Distinctive Competencies Capabilities Differentia- tion Low Cost Superior Efficiency Quality Innovation Customer Respon- siveness

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Distinctive Competencies, Resources, and Capabilities Resources Distinctive Competencies Capabilities Differentia- tion Low Cost Value Creation Superior Efficiency Quality Innovation Customer Respon- siveness

Figure 4.7: The Roots of Competitive Advantage: 

Figure 4.7: The Roots of Competitive Advantage Distinctive Competencies, Resources, and Capabilities Resources Higher Profits Distinctive Competencies Capabilities Differentia- tion Low Cost Value Creation Superior Efficiency Quality Innovation Customer Respon- siveness

Distinctive Competencies, Resources, and Capabilities (Continued): 

Distinctive Competencies, Resources, and Capabilities (Continued) Strategy and Competitive Advantage Resources & Capabilities (Competencies) Strategies Shape Build Figure 4.8: The Relationship Between Strategies

Distinctive Competencies, Resources, and Capabilities (Continued): 

Distinctive Competencies, Resources, and Capabilities (Continued) The Role of Luck

The Durability of Competitive Advantage: 

The Durability of Competitive Advantage Barriers to Imitation Imitating Resources Imitating Capabilities Capability of Competitors Strategic Commitment Industry Dynamism

Why Do Companies Fail?: 

Why Do Companies Fail? Inertia

Why Do Companies Fail?: 

Why Do Companies Fail? Inertia Prior Strategic Commitments

Why Do Companies Fail?: 

Why Do Companies Fail? The Icarus Paradox

Avoiding Failure and Sustaining Competitive Advantage: 

Avoiding Failure and Sustaining Competitive Advantage Focus on the Building Blocks of Competitive Advantage Institute Continuous Improvement and Learning Track Best Industrial Practice and Use Benchmarking Overcome Inertia

Chapter Summary: 

Copyright  1998 by Houghton Mifflin Company. All rights reserved. Chapter Summary Competitive Advantage Generic Building Blocks of Competitive Advantage Business Functions and the Value Chain Distinctive Competencies, Resources, and Capabilities Durability of Competitive Advantage Why Do Companies Fail? Avoiding Failure and Sustaining Competitive Advantage