week9

WEEK 9

1. Mwailu & Mercer has described resource-based view (RBV) as the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable interchangeable and intangible tangible resources at the firm’s disposal.

Organizations may have tangible resources like assets, human resource and capital or intangible resources like brand image, information, culture and knowledge. These resources used in the organization certainly have its importance but the matter of concern is how they are used. In strategy, resource based view can be defined as the formulation of strategy so as to gain competitive advantage over other by focusing on how efficiently and effectively the internal resources and capabilities of the organization can be used. Each and every organization has same or similar resources but it makes difference depending on how they are used.

2. The analysis that can be undertaken to assess the internal factors of an organization is known as internal strategic analysis. Internal factors of the organizations may include resources, competences, goals, objectives, structure, and systems and so on. These internal factors help in identification of performance of the business according to the change in external environment and its strategic capabilities that can be used to gain competitive advantage.

There are different model to undertake internal analysis of the organization:

McKinsey’s 7s Model

McKinsey’s 7s model assesses all the internal aspects of the organization. It helps in the analysis of the performance of the organization by implementing the strategies using staffs and skills as well as shared value. It can also identify whether the systems and structures are compatible or not.

VRIN Model

VRIN model helps to spot out the organization’s strategic capabilities and key resources. After identification of these resources and capabilities they are used in such a way so that no one can cope and imitate it and is rare. These resources even help to gain competitive advantage over others by forming core competences.

Value Chain Analysis

A chain of activities starting from extraction of raw materials to offering final products to customers is known as value chain whereas value chain analysis is the analysis of activities that adds value within the chain, relationships between the activities and those activities that can be seen in terms of strengths of an organization. This analysis divides the value chain into different groups of activities, identifies the activities that are best and worse within the value chain and identifies activities that give competitive advantage, value to the products and decreases costs within the value chain of an organization and develop strategies that best utilize these activities and other resources.

SWOT Analysis

SWOT analysis helps to identify the strengths, weaknesses, opportunities and threats of an organization. Strengths and weaknesses of organization are identified for internal analysis whereas opportunities and threats are identified for external analysis. It helps to identify resources knowledge and culture of an organization which is the strengths of an organization and these strengths can be used to grab the opportunities in the organization’s external environment and overcome weaknesses. It also helps to identify weaknesses which must be defeated.

Reference

Books
JohnsonG,ScholesKandWhittingtonR(2009),FundamentalsofStrategy,PrenticeHall.
LynchR(2008)StrategicManagement,5thEdition,PrenticeHall.