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Chapter 6

BU481 Chapter Notes - Chapter 6: Southwest Airlines, Social Complexity, Birds Eye View

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Karin Schnarr

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Chapter 6 Resource Analysis: The Strategy-Resource Linkage
The nature of resources
It’s ot aout our asolute uer of resoures ut rather our relatie aout opared to
your competitors)
Certain resources may be easy or hard to adapt to the proposed strategy (i.e. if you have a lack
of manufacturing capacity because of lack of workers it will take significant time to hire them
The value of some resources is specific to the context but others have value which is
trasferrale aross differet otets i.e. a oputer is a asset that’s aluale i a
o Soe are hard to trasfer i.e. a Caadia aager’s skills to the Meia arket
Other characteristics of resources (more general, less business-specific)
Distinctive competence
o The core activities that a business can perform better than its competitors
Core skills
o The collective skills of the group accumulated by management
o Hard to develop
Core competencies
o The skills that span across different business lines and units
These 3 allow you to explore in a broader sense. For example, bring up a quick and easy
reference point for creating ideas and then raising questions for a more detailed view
The disadvantage is that due to their birds eye view it may be hard to pin down if there is an
actual core competency in the business
Resources and Competitive Advantage
For a resource to offer a competitive advantage it must be VIRO. A resoure is’t a opetitie
adatage if it’s not looked at in the strategic and competitive context
o Do a fir’s resoures ad apailities eale the fir to reate alue  egatig
environmental threats or taking advantage of environmental opportunities?
o Even if it is valuable, you must still answer the rest of the questions before determining
if it will provide competitive advantage
o How many competing firms already possess specific, valuable resources and
capabilities? In practical terms, a specific resource can be considered rare if only one or
2 out of 10 firms have it.
o It should be rare, even if just temporarily
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