Miles A. Zachary
MGT 4380
 Discuss Exam 1
 Lecture
 RBT
 Intellectual Property
 Value Chain
 Alternative Theories in Strategy
 SWOT Analysis
 SWOT Exercise
 Simulation
 Resource-based theory (RBT) suggests that firms that
possess strategic resources have a greater chance of
developing a competitive advantage over competitors
and in turn, higher profitability
 A strategic resources is an asset that is:
 Difficult to imitate
 Rare
 Valuable
 Non-substitutable
 Difficult to imitate-competitors have a hard time
duplicating the resource
 Rare-the resource is difficult to cultivate or find in the
industry
 Valuable-a resource that helps a firm create strategies
that capitalize on opportunities and ward off threats
 Non-substitutable-competitors are unable to find an
alternative way to enjoy the benefits provided by a
particular resource
 Additionally, some firms are able to bundle strategic
and non-strategic (generic) resources together
 Firms able to combine multiple resources are often
able to create a unique business model that puts the
firm far ahead of its competitors
 Ex. Southwest Airlines: Combined their unique
corporate culture (a strategic resource) with other
generic (yet valuable) resources such as direct flights,
low fares, one-plane fleet, and unique passenger
boarding to create an effective and efficient
competitive advantage
 Firms in possession of strategic resources that meet
the four criteria of RBT are often in a position to gain a
sustained competitive advantage
 A sustained competitive advantage is one that will
endure over time and will help the firm remain
successful well into the future
 While anyone of the qualities is good, possessing a
resources with fewer than all four will likely lead to
only a temporary advantage
 On occasion, the external environment can turn a
generic resource into a strategic resource
 Resources are goods and services owned by an
organization
 Tangible Resources-resources readily seen, touched,
and quantified; often physical objects or places
 Eg., a firm’s property, plant, and equipment, cash
 Intangible Resources-resources difficult to see, touch,
or be quantified
 Eg., knowledge and skills, organizational culture, firm
reputation
 Capabilities refer to the firm’s ability to bundle, manage,
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or otherwise exploit resources such that value is added and
a competitive advantage results
More generally, capabilities are what a firm can do with
their resources
Capabilities tend to arise over time
Dynamic capabilities are the ability to create new and
better capabilities
Adaptive firms use dynamic capabilities to stay up or ahead
of the every-changing environment
Ex. Coca-Cola-has a knack for being an excellent brand
builder
 While resources and capabilities are determinants of
firm performance, customers must often be convinced
to purchase the resulting goods and services
 The marketing mix (or 4 Ps) helps firms do that by
providing a strong alignment among:
 Product-what a firm sells
 Price-what it sells it for
 Place-where it sells it
 Promotion-how a firm communicates these things
 Intellectual property refers to creations of the mind (e.g.,
inventions, artistic products, symbols, etc.)
 Four main types of intellectual property include:
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Patents
Trademarks
Copyrights
Trade Secrets
 Intellectual property resources are strategic resources when
they fit the RBT criteria
 Even IP resources that have only some of the RBT criteria
can be bundled with other resources
 Can be protected by formal and/or informal methods
 Patents-legal decrees that protect inventions from
direct imitation for a limited period of time
 Difficult to get; must be new, non-obvious, and useful
 Patents are core advantages in many industries
 Trademarks-protected phrases, pictures, names, or
symbols used to identify an organization
 Help an organization stand out and build an identity in
the marketplace
 Other firms use trademarks to carve out niche positions
 Copyrights-provide exclusive rights to the creators of
artistic works (e.g., books, movies, songs, etc.)
 Pirated material violates copyright material
 Trade Secrets-formulas, practices, and designs that
are central to a firm’s business, but remain unknown to
competitors
 Ex.-KFC’s secret spice blend, the formula for WD-40, the
recipe for Coca-Cola
 The copying of trade secrets is legally protected;
however, once a secret is revealed, it is legally a secret no
longer
 The value chain charts the path by which products
and services are created and eventually sold to
customers; firm specific
 Organizations need to consider their resources and
capabilities alongside the value chain when
formulating and implementing strategies
 Composed of two sets of activities
 Primary Activities
 Secondary Activities
 A supply chain is a system of people, activities,
information, and resources involved in creating a
product and moving it to the customer
 The supply chain is a broader concept that captures
the entire process of creating and distributing a
product, often times across different firms
 Best value supply chains combine the concept of the
supply chain with the considerations of the valuecreation process within a firm
 Like other multi-metric performance assessments,
BVSCs focus on total value added, specifically to
customers
 Four components:
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Strategic supply chain management
Agility
Adaptability
Alignment
 Using a supply chain to create competitive advantages
and enhance performance
 Strategic SC use is measured by:
 Speed-time from initiation to completion of the
production and distribution process
 Quality-relative reliability of SC processes
 Cost-enhance value by reducing expenses
 Flexibility-refers to the responsiveness of the supply
chain to changes in customer needs
 The supply chain’s relative capacity to act rapidly in
response to changes in supply and demand
 Agility can be achieved by using buffers
 Excess capacity
 Technical information systems
 Co-locating with customers can provided important
face-to-face interaction
 Adaptability is the willingness and capacity to reshape
supply chains when necessary
 While one supply chain is desired since it is cost
effective, it is not always the best value solution
 Having a variety of options increases adaptability
 Alignment refers to creating consistency in the
interests of all participants in a supply chain
 When situations arise that pit the interests of one
party and the whole supply chain against each other,
conflict ensues
 Maintaining alignment is necessary to keep the supply
chain operating with maximum efficiency
 Carefully writing incentives, collaborating on
forecasting, and meeting with participants can
improve supply chain alignment
 Enactment-firms can create and manipulate their
own environment through outstanding strategy
 Environmental determinism-a firm’s environment
is a dominating force that determines the fate of the
organization
 Institutional theory-suggests that firms are bound
by social pressures that result in imitation of strategies
 Transaction cost economics-firms determine
whether to make or buy the products/services they
need based on transaction costs
 SWOT analysis is a simple tool firms can use to
evaluate their internal strengths and weaknesses
and external opportunities and threats when
determining strategic decisions
 Internal and external factors should not be confused
with each other
 Opportunities should not be confused with strategic
moves to capitalize on opportunities
 The simplicity of the analysis suggests that it should
not be over-evaluated