Strategic Position: Strategic Capability
Transcript of Strategic Position: Strategic Capability
![Page 1: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/1.jpg)
Strategic Position:
Strategic Capability
•Strategic Management (5 ECTS)
•Ismo Vuorinen
•Principal Lecturer
•Autumn 2010
![Page 2: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/2.jpg)
Core Concepts in
Strategic Capability
Foundations Cost efficiency
SustainabilityOrganisational
knowledge
Analysis Development
![Page 3: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/3.jpg)
What is Strategic Capability?
Strategic capability refers to
the resources and competences of an
organisation needed for it to survive and
prosper.
![Page 4: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/4.jpg)
Strategic Capabilities and Competitive
Advantage
![Page 5: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/5.jpg)
What are Resources?
Tangible resources are physical assets
of an organisation such as plant, labour,
and finance.
Intangible resources are non-physical
assets such as information, reputation,
and knowledge.
![Page 6: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/6.jpg)
Resource Categories
Physical
resources
Financial
resources
Human
resources
Intellectual
capital
![Page 7: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/7.jpg)
The Terminology of
Strategic Capability
Threshold resources
Threshold competences
Unique resources
Core competences
![Page 8: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/8.jpg)
What are
Core Competences?
Core competences are the skills and abilities
by which resources are deployed through an
organisation’s activities and processes such as
to achieve competitive advantage in ways that
others cannot imitate or obtain.
![Page 9: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/9.jpg)
Bases of Competences
Cost efficiency
Value-added to the customer
Managing internal and external linkages
Robustness
![Page 10: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/10.jpg)
Sources of Cost Efficiency
Cost
efficiency
Economies
of scaleExperience
Product
design
Supply
costs
![Page 11: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/11.jpg)
The Experience Curve
Competences in activities develop over
time based on experience, resulting in
cost efficiencies
◦ Growth may not be optional
◦ Unit costs should decline year on year
◦ First mover advantage is important
![Page 12: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/12.jpg)
The Experience Curve
![Page 13: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/13.jpg)
Capabilities for achieving and sustaining
competitive advantage
Value
Rarity
Inimitable
Substitution
Dynamic
![Page 14: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/14.jpg)
Rarity of Strategic Capabilities
Ease of transferability
Sustainability
Core rigidities
![Page 15: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/15.jpg)
Core Competences Lead to
Competitive Advantage When…
They relate to an activity that underpins the value in the product features
They lead to levels of performance that are significantly better than competitors
They are difficult for competitors to imitate
![Page 16: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/16.jpg)
Criteria for Inimitability
Robustness
of strategic
capability
Complexity Culture and
history
Causal
ambiguity
![Page 17: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/17.jpg)
What are Dynamic Capabilities?
Dynamic capabilities are an
organisation’s abilities to renew and
recreate its strategic capabilities to meet
the needs of a changing environment.
![Page 18: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/18.jpg)
What is Organisational Knowledge?
Organisational knowledge is the
collective experience accumulated
through systems, routines, and activities
of sharing across the organisation.
![Page 19: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/19.jpg)
Diagnosing Strategic Capability
Activity maps
Benchmarking SWOT analysis
Value chain/
Value network
![Page 20: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/20.jpg)
What is a Value Chain?
A value chain describes the categories
of activities within and around an
organisation, which together create a
product or service.
![Page 21: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/21.jpg)
The Value Chain
![Page 22: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/22.jpg)
What is a
Value Network?
A value network is the set of
interorganisational links and relationships
that are necessary to create a product or
service.
![Page 23: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/23.jpg)
The Value Network
![Page 24: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/24.jpg)
Understanding the Capabilities
in Relation to the Value Network
Which activities are central important to
organisation’s strategic capability?
Where are the profit pools?
What should be outsourced?
Who might be the best partners in the
parts of the value network?
![Page 25: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/25.jpg)
An Activity System Map
![Page 26: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/26.jpg)
Lessons Learned
from Activity Maps
Consistency and reinforcement
Difficulties of imitation
Trade-offs
![Page 27: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/27.jpg)
Approaches to Benchmarking
Historical benchmarking
Industry/sector benchmarking
Best-in-class benchmarking
![Page 28: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/28.jpg)
SWOT Analysis
Strengths Weaknesses
Opportunities Threats
![Page 29: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/29.jpg)
SWOT steps
Identify current “S”
Identify key SWOTs
Explore relationships strengths and weaknesses
◦ ---- opportunities and threats
Recommend new/modified strategy
![Page 30: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/30.jpg)
Improving SWOT
See as general aid.
Make measures and criteria explicit.
Prioritize SWOTs.
Use outside consultants.
Specify and substantiate SWOTs.
![Page 31: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/31.jpg)
Limitations in Managing
Strategic Capabilities
Competences valued but not
understood
Competences are not valued
Competences are recognised, valued, and
understood
![Page 32: Strategic Position: Strategic Capability](https://reader031.fdocuments.in/reader031/viewer/2022022507/62172d161ef21412db2337aa/html5/thumbnails/32.jpg)
Developing
Strategic Capabilities
Add and change
Extend
Stretch
Exploit
Cease
Develop externally