THOMAS L. WHEELEN J.

DAVID HUNGER

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 Resource-Based Approach to Organizational Analysis

Internal strategic factors --

–Critical strengths and weaknesses

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 Resource-Based Approach to Organizational Analysis

Core and Distinctive Competencies

•Resources
•Capabilities
•Competency
•Core competency
•Distinctive competency

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 Core and Distinctive Competencies

VRIO Framework – (Barney)

–Value – Does it provide customer value

and competitive advantage?
–Rareness – Do no other competitors
possess it?
–Imitability – Is it costly for others to
imitate?
–Organization – Is the firm organized to exploit
the resource?

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 Resource-Based Approach to Organizational Analysis
5-Step Resource-based Approach to
Strategy Analysis – (Grant)

1. Identify and classify the firm’s resources in terms of

strengths and weaknesses.
2. Combine the firm’s strengths into specific capabilities and
core competencies.
3. Appraise the profit potential of these capabilities and
competencies in terms of their potential for sustainable
competitive advantage and the ability to harvest the
profits resulting from their use. Are there any distinctive
competencies?
4. Select the strategy that best exploits the firm’s
capabilities and competencies relative to external
opportunities.
5. Identify resource gaps and invest in upgrading
weaknesses.
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 Sustainability of Advantage

Sustainability of an Advantage

•Durability
•Imitability
–Transparency
–Transferability
–Replicability

Explicit versus Tacit Knowledge

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Continuum of Sustainability

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 Business Models

Business Model
5 elements
•Who it serves
•What it provides
•How it makes money
•How it differentiates and sustains
competitive advantage
•How it provides its product/service 21

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 Business Models

Types of Models --
–Customer Solutions Model
–Profit Pyramid Model
–Multi-Component System/Installed Base Model
–Advertising Model
–Switchboard Model
–Time Model
–Efficiency Model
–Blockbuster Model
–Profit Multiplier Model
–Entrepreneurial Model
–De Facto Standard Model

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 Value-Chain Analysis

Typical Value Chain for

a Manufactured Product

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Corporation’s Value Chain

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 Scanning Functional Resources & Capabilities

Basic Organizational Structures --

–Simple structure
–Functional structure
–Divisional structure
–Strategic business units (SBU’s)
–Conglomerate structure

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 Scanning Functional Resources & Capabilities

Strategic business units (SBU’s)

1. a unique mission.
2. identifiable competitors
3. an external market focus
4. control of it’s business functions

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 Corporate Culture

Attributes
• Cultural Intensity – degree of acceptance
• Cultural Integration – shared values

Functions
1. Convey a sense of identity for employees
2. Generate employee commitment to the
organization
3. Adds to the stability of the organization social
system
4. Serves as a frame of reference for employees to
make sense of organizational activities and as a
guide for behavior

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 Strategic Marketing Issues

Strategic Marketing Issues

–Market Position & Segmentation
–Marketing Mix
–Product Life Cycle
–Brand & Corporate Reputation

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 Strategic Financial Issues

–Financial leverage
Ratio of total debt to total assets
–Capital budgeting
Analysis and ranking of investments in fixed
assets based on a hurdle rate

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 Strategic Research & Development Issues

–R&D Intensity
Spending as a % of sales

–Technological Competence
Ability to develop and innovate

–Technology Transfer
Ability to move products from research
to the market

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Internal Factor Analysis Summary Table

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Thank you

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