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Chapters 4 & 7

Chapters 4 & 7. The Resource-Based View of the Firm (RBV), Value Chain Benchmarking, Leveraging International Competitiveness, & SWOT Analysis. Resource-Based Strategies.

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Chapters 4 & 7

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  1. Chapters 4 & 7 The Resource-Based View of the Firm (RBV), Value Chain Benchmarking, Leveraging International Competitiveness, & SWOT Analysis

  2. Resource-Based Strategies Resource-based strategiesattempt to exploit a company’s valuable and rare resources and competitive capabilities to deliver value to customers in ways rivals find it difficult to match

  3. Identifying Competitively Important Resources and Capabilities • Common types of valuableresources and competitive capabilities include • Skills or specialized expertise in a competitively important capability • Valuable physical assets • Valuable human assets or intellectual capital • Valuable organizational assets • Valuable intangible assets • Competitively valuable alliances or cooperative ventures

  4. Determining the Competitive Power of a Company Resource • Is the resource really competitively Valuable? • Is the resource Rare and something rivals lack? • Is the resource hard to copy or Imitate? • Is the company Organized to take advantage of its resource strengths?

  5. RBV – Case Analysis Tool

  6. Value Chain Benchmarking • Focuses on cross-company comparisons of how certain activities are performed and costs associated with these activities • Purchase of materials • Payment of suppliers • Getting new products to market • Performance of quality control • Filling and shipping of customer orders

  7. Company Value Chain

  8. Value Chain Benchmarking – Case Analysis Example

  9. Establishing International Operations • Choosing between localized multicountrystrategies or a global strategy • Deciding upon the degree to vary competitive approach country by country depends on cross-country differences in buyer preferences and market conditions

  10. Strategy Options for Entering and Competing in Foreign Markets • General strategic options for expanding outside a company’s domestic market include: • Exporting • Licensing • Franchising strategy • Strategic alliances or joint ventures • Multi-country vs. global strategy

  11. Location-Based Revenue Drivers • Consumer tastes and preferences • Consumer purchasing power • Consumer buying habits • Distribution channel emphasis • Demands for localized products • The strength of competitive rivalry

  12. Location-Based Cost Drivers • Manufacturing costs vary from country to country based on • Wage rates • Worker productivity • Government regulations and industry subsidies • Inflation/exchange rates • Energy costs • Tax rates

  13. Using Value Chain Improvements to Build Competitive Advantage • Multinational and global companies are able to coordinate activities across borders to achieve competitive advantage by • Transferring knowledge and skills developed in one location to a location in another country • Shifting production to locations having excess capacity or underutilized personnel • Shift production between plants in different countries to take advantage of shifting exchange rates, energy costs, or changes in tariffs and quotas

  14. Using Profit Sanctuaries to Wage a Strategic Offensive • Profit sanctuaries are protected markets that provide multinational companies with substantial profits • A company’s domestic market is most likely its chief profit sanctuary • Profit sanctuaries can give a multinational company added financial resources to wage a market offensive against a domestic-only competitor in its home market

  15. Leveraging Intl. competitiveness – Case Analysis Tool

  16. Taking Inventory of a Company’s Strengths, Weaknesses, Opportunities and Threats • S W O Trepresents the first letter in • Strengths • Weaknesses • O pportunities • Threats • For a company’s strategy to be well-conceived, it must be • Matched to its resource strengths and weaknesses • Aimed at capturing its best market opportunities and defending against external threats to its well-being

  17. Identifying Resource Weaknessesand Competitive Deficiencies • A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage in the marketplace • Resource weaknesses relate to • Inferior or unproven skills,expertise, or intellectual capital • Deficiencies in competitively important physical, organizational, or intangible assets • Missing or competitive inferior capabilities in key areas

  18. Identifying External Threats to Profitability and Competitiveness • Technological change • Entry of new competitors • Burdensome regulations • Unfavorable demographic shifts • Rise in interest rates • Adverse shifts in foreign exchange rates

  19. RBV – Case Analysis Tool

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