Resources and Capabilities
Page 1
Competitive Advantage: An Internal View
• What is a resource?
• What is a capability?
• What’s the difference:
–Potential vs. Kinetic energy?
• How do resources and/or capabilities
contribute to competitive advantage?
–Decisions
–Actions and maneuvers
–Force, endurance
Page 2
Resources and Capabilities
Page 3
The Cola Wars – Coke vs. Pepsi
Page 4
Resources
• Inputs into a firm’s value-producing stream
• What a firm has
• Capital equipment
•
•
•
•
Skills of employees
Brand names
Deep pockets
Strategic alliances
Page 5
Capabilities
• The ability to integrate resources to achieve a
desired objective
• What a firm can do
• Quick introduction of new products
• Preemptive price-cutting
• Attention-grabbing advertising
Page 6
Boxing Resources
Boxer 1
Boxer 2
• 6’6” tall
• 5’10” tall
• 233 lbs
• 175 lbs.
• Runs 24 mi./week
• Practices yoga
• Eats 240g protein/day
• Likes to eat pasta and salad
• Has 20/20 vision
• Has 20/100 vision, must wear
contacts
• Quick reflexes
• Fought in 3 championship fights
• Coached by Cuban national
team coach
• Just learned how to box
• Prefers to coach himself
Page 7
Boxing Capabilities
Boxer 1
Boxer 2
• Longer punching reach
• ??
• ??
• Punches with great force, speed and
power
• Endurance to compete aggressively
for 10-round match
• Able to quickly move away from
fierce attacks
• Able to quickly see and interpret
rival’s hand, feet, and eye movements
• Able to blend own and coach’s
experience for superior strategy and
tactics
Page 8
Value Chain Analysis
To identify which resources and capabilities can add value
Support
Activities
Primary Activities
Page 9
Inbound
Logistics
Support
Activities
Primary Activities
Page 10
Operations
Inbound
Logistics
Support
Activities
Primary Activities
Page 11
Outbound
Logistics
Operations
Inbound
Logistics
Support
Activities
Primary Activities
Page 12
Primary Activities
Marketing
& Sales
Outbound
Logistics
Operations
Inbound
Logistics
Support
Activities
Page 13
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Inbound
Logistics
Support
Activities
Page 14
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Inbound
Logistics
Support
Activities
Procurement
Page 15
Technological Development
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Procurement
Inbound
Logistics
Support
Activities
Page 16
Technological Development
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Procurement
Inbound
Logistics
Support
Activities
Human Resource Management
Page 17
HQ: TMT & Firm Infrastructure
Technological Development
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Procurement
Inbound
Logistics
Support
Activities
Human Resource Management
Page 18
HQ: TMT & Firm Infrastructure
Technological Development
Primary Activities
Service
Marketing
& Sales
Outbound
Logistics
Operations
Procurement
Inbound
Logistics
Support
Activities
Human Resource Management
Page 19
Burger Joint Value Chain Strengths and Weaknesses
H.Q.
R&D
Purch
HRM
IBL
MFG
OBL
MKT
SVC