Internal Analysis: Resources

"Make the best burger, don't worry about cost"

Depicts how and why we move from the external to internal environment. Formulating a strategy that enhances the firm's chances of gaining and sustaining competive advantage means having certain types of resources and capabilites that combine to form core competncies. The best firms continually identify these to survice and succeed. Firms the determine how to manage and develop internal strengths to respond to the challenges in their external environment

Respinse must be dynamic. Rather than creating a onetime and statci fit, the firm's internal strengths need to change with its external environment in a dynamic fashion. At each point the goal should be to develop resources, capabilites, and competenices that create a strategic fit with the firm's environment

Unique strengths embedded deep within a firm. Core competencies allow a firm to differentiate its products and service from those of its rivals, creating higher value for the customer or offering products and services of comparable value at a lower cost

Any assets such as cash, building, machinery, or intellectual property that a firm can draw on when crafting and executing a strategy. Resources can be intangible or tangible

The organisational and managerial skills necessary to orchestrate a diverse set of resources and to deploy them strategically. Capabilities are by nature intangible. They find their expression in a company's structure, routine and culture

Describe a firm's ability to create, deploy, modify, reconfigure, upgarde, or leverage its resources over time in its question for competive advantage. They are essential to move beyond a short-lived advantage and create a sustainable competitive advantage. For a firm to sustain its advantage, any fit between its internal strengths and the external environemtn must be dynamic. That is, the firm must be able to change its internal resource base as the external environment changes

The firm's current level of intangible resources

The firm's level of investments to maintain or build a resource.

Built through investments overtime

Describes the internal activities a firm engages in when transforming inputs into outputs. Each activity the firm performs along the horizontal chain adds incremental value - raw materials and other outputs are transformed into components that are assembled into finished products or service for the end consumer. Each activity the firm performs along the value chain adds incremental costs. A careful analysis of vakue chain allows strategic leaders to obtain more detailed and fine-grained understanding of how the firm's economic value creation (V-C) breaks down into distinct activities that help determine perceived value and the costs to create it.

When a firm generates value greater than the costs to create

Add value directly as the firm transforms inputs into outputs

Add value indirectly

A firm as a network of interconnected activiites that can be the foundation of its competive advantge. Socially complex and causally ambiguous. They are difficult to imitate entirely which enhances a firm's possibility of developing a sustainable competitve adavantge based on a set of distinct but interconnected activities

Increases the likelihood that a firm is able to gain a competitive advantage. If a firm achievs a dynamic strategic fit, it is likely to be able to sustain its advantage overtime