21632 Chapter Notes - Chapter 3: Value Chain, Human Resources
Strategy Capabilities II
Value chain is used to analyse strategic capability in three ways:
•As a generic description of activities
•Analysing competitive position via VRIO
•Analysing cost and value of activities, involving:
-Identifying sets of value activities
-Relative importance of activity costs
-Relative importance of activities externally
-Cost reduction
Value System - set of inter-organisational links and relationships that are necessary to create a
product or service.
Understanding the value system:
-Activities and cost/price structures
-Profit pools, referring to different levels of profit available at different parts of the value system
-Make or buy decision
-Partnering
Activity Systems - the way in which resources are deployed through the organisation actually takes
form in the activities pursued by that organisation.
Mapping activity systems:
-Relationship to the value chain
-Importances of linkages and fit (danger of piecemeal change and managing change)
-Relationship to VRIO
-Disaggregation
-Superfluous activities
Managing Strategic Capability
Methods of developing strategic capabilities:
•Internal capability development - building and recombining, leveraging, and stretching
capabilities
•External capability development - acquisition or alliances
•Ceasing activities that do not provide an advantage
•Monitor outputs and benefits
•Awareness development
Resource-based view (RBV) - asserts that the competitive advantage and superior performance of
an organisation is explained by the distinctiveness of its capabilities.
Tangible resources - quantifiable:
-Financial
-Organisational
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