Secondary activities provide the infrastructure that the primary – activities to take place e.g. general admin, human resources management, research and development, technology, procurement etc. Differentiation and response time can be used instead of cost analysis e.g. excellent customer service is a differentiating factor The resource-based view (RBV) see below p102 – The product/market evolution based on product lifecycle p103 – financial analysis based on past data using the balance sheet and income statement, the – key financial ratios are: Liquidity the ability of an organisation to meet its objectives – Leverage looks at the source of an organisation’s capital – Activity looks at how well an organisation is using its resources – Profitability measure how well an organisation is managed – Learn Figure 4.7: The value-chain approach to internal assessment p102 (same as FTI) *personal note The Resource-Based View (RBV) of an Organisation p102 # Study Note 1 According to the RBV of an organisation, there are 3 types of resources: Tangible assets on an organisation’s balance sheet e.g. property and warehouses – Intangible assets cannot see or touch but are critical to creating competitive advantage e.g. brand – names, patents, knowledge of the market Organisational capabilities the ability of an organisation to turn inputs into outputs – 2 For a resource to be valuable (a strength) to a company it must be: Superior to the resources of competitors e.g. a better location Scarce so that competitors struggle to get hold of the resource Difficult to imitate e.g. a view over the ocean Under the control of management Slow to depreciate Difficult to substitute 3 The hierarchy of resources p103: Strategic/competitive resources the unique resources or capabilities of an organisation that – cannot be easily emulated by its competitors Base resources those resources that an organisation cannot operate without – Peripheral resources necessary resources but can easily be outsourced – Step 2: Evaluate Strategic Internal Factors p104 # Note 1 Yardsticks that management can use to determine whether an internal factor is a strength or a weakness: A comparison with the organisation’s performance in the past A comparison with competitors A comparison with industry ratios Benchmarking the search for the best practices among competitors and non-competitors that – lead to their superior performance
Secondary activities – provide the infrastructure that the primary activities to take place e.g. general admin, human resources management, research and development, technology, procurement etc. Differentiation and response time can be used instead of cost analysis e.g. excellent customer service is a differentiating factor The resource-based view (RBV) – see below p102 The product/market evolution – based on product lifecycle p103 financial analysis – based on past data using the balance sheet and income statement, the key financial ratios are: Liquidity – the ability of an organisation to meet its objectives Leverage – looks at the source of an organisation’s capital Activity – looks at how well an organisation is using its resources Profitability – measure how well an organisation is managed Learn Figure 4.7: The value-chain approach to internal assessment p102 (same as FTI) *personal note The Resource-Based View (RBV) of an Organisation p102 # Study Note 1 According to the RBV of an organisation, there are 3 types of resources: Tangible assets – on an organisation’s balance sheet e.g. property and warehouses Intangible assets – cannot see or touch but are critical to creating competitive advantage e.g. brand names, patents, knowledge of the market Organisational capabilities – the ability of an organisation to turn inputs into outputs 2 For a resource to be valuable (a strength) to a company it must be: Superior to the resources of competitors e.g. a better location Scarce so that competitors struggle to get hold of the resource Difficult to imitate e.g. a view over the ocean Under the control of management Slow to depreciate Difficult to substitute 3 The hierarchy of resources p103: Strategic/competitive resources – the unique resources or capabilities of an organisation that cannot be easily emulated by its competitors Base resources – those resources that an organisation cannot operate without Peripheral resources – necessary resources but can easily be outsourced Step 2: Evaluate Strategic Internal Factors p104 # Note 1 Yardsticks that management can use to determine whether an internal factor is a strength or a weakness: A comparison with the organisation’s performance in the past A comparison with competitors A comparison with industry ratios Benchmarking – the search for the best practices among competitors and non-competitors that lead to their superior performance
MNG2601-study_notes.docx