Quản trị kinh doanh - Analyzing resources & capabilities

Analyzing Resources & CapabilitiesThe role of resources and capabilities in strategy formulation.The resources of the firmOrganizational capabilitiesAppraising the profit potential of resources and capabilities Creating new capabilities.OUTLINE THE FIRMGoals and ValuesResources andCapabilitiesStructure and SystemsTHE INDUSTRYENVIRONMENTCompetitorsCustomersSuppliersSTRATEGYSTRATEGYThe Firm-Strategy InterfaceTheEnvironment-Strategy InterfaceShifting the Focus of Strategy Analysis:From the External to the Internal EnvironmentRationale for the Resource-based Approach to StrategyWhen the external environment is subject to rapid change, internal resources and capabilities offer a more secure basis for strategy than market focus.Resources and capabilities are the primary sources of profitability 1946 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000HondaTechnicalResearchInstitutefounded1st motorcycle:98cc, 2-cycleDream D4 cycle engine405ccmotorcyclePower products:ground tillers, marineengines, generators,pumps, chainsawssnowblowersFirst product: Model Aclip-on enginefor bicyclesThe 50ccSupercubN360 minicar1000ccGoldwingtouringmotor cycleAcura CardivisionCompetes inIsle of Man TTmotorcycleraces4-cylinder750ccmotorcyclePortablegeneratorEnters Formula 1Gran Prix racingHondaCivicEnters Indycar racing1st gasoline-poweredcar to meet US LowEmission Vehicle StandardCivic GS(naturalgaspowered)Civic Hybrid(dual gasoline/electric)Home co-generationsystemHonda FCXfuel cellcar The Evolution of Honda Motor CompanyPrecision MechanicsFine OpticsMicro-Electronics35mm SLR cameraCompact fashion cameraEOS autofocus cameraDigital cameraVideo still cameraPlain-paper copierColor copierColor laser copier Laser copierBasic faxLaser fax Mask alignersExcimer laser alignersStepper aligners Inkjet printerLaser printer Color video printerCalculatorNotebook computerCanon: Products and Core Technical CapabilitiesLinks between Products & Capabilities: Capability-Based Strategy at 3MCarborundumminingSandpaperScotchtapeRoad signs& markingsPost-it notesAudio tapeSurgical tapes& dressingsVideotapeAcetate filmFloppy disks & data storage productsPharmaceuticalsHousewares/kit-chen productsAbrasivesAdhesivesNew-productdevelopment &introduction Thin-film technologiesPRODUCTSCAPABILITIESMaterials sciencesHealth sciencesMicroreplicationFlexiblecircuitryCarborundumminingSandpaperScotchtapeRoad signs& markingsPost-it notesAudio tapeSurgical tapes& dressingsVideotapeAcetate filmFloppy disks & data storage productsPharmaceuticalsHousewares/kit-chen productsAbrasivesAdhesivesNew-productdevelopment &introduction Thin-film technologiesPRODUCTSCAPABILITIESMaterials sciencesHealth sciencesMicroreplicationFlexiblecircuitryEvolution of Capabilities and Products: 3MEastman Kodak’s Dilemma1980’s1990’sResources & CapabilitiesBusinessesChemical ImagingOrganic ChemistryPolymer technologyOptomechtronicsThin-film coatingsBrandsGlobal DistributionFilmCamerasDIVESTS: Eastman Chemical, Sterling Winthrop, DiagnosticsNeed to build digital imaging capabilityDigital Imaging Products (e.g. Photo CD System; Advantix cameras & film Fine ChemicalsPharmaceuticalsDiagnosticsSTRATEGYINDUSTRY KEYSUCCESS FACTORSCOMPETITIVEADVANTAGEORGANIZATIONALCAPABILITIES RESOURCESTANGIBLE INTANGIBLE HUMAN FinancialPhysicalTechnologyReputationCulture Skills/know-howCapacity for communication & collaborationMotivationThe Links between Resources, Capabilities and Competitive AdvantageAppraising ResourcesRESOURCE CHARACTERISTICS INDICATORS Financial Borrowing capacity Debt/ Equity ratio Internal funds generation Credit ratingTangible Net cash flowResources Physical Plant and equipment: Market value of size, location, technology fixed assets. flexibility. Scale of plants Land and buildings. Alternative uses for Raw materials. fixed assets Technology Patents, copyrights, know how No. of patents owned R&D facilities. Royalty incomeIntangible Technical and scientific R&D expenditureResources employees R&D staff Reputation Brands. Customer loyalty. Company Brand equity reputation (with suppliers, customers, Customer retention government) Supplier loyaltyHuman Training, experience, adaptability, Employee qualifications,Resources commitment and loyalty of employees pay rates, turnover.Firms with the Highest Ratios of Market Value to Book ValueAccenture 27.6 ConsultingGillette 17.9 Personal careAnheuser Busch 16.8 BrewingGap 17.0 RetailingKellogg 16.0 FoodDell Computer 15.9 ComputersOracle 12.2 SoftwareGlaxoSmithKline 11.0 DrugsHennes & Mauritz 10.5 RetailingSAP 10.1 SoftwareSCM 10.0 ComputersPfizer 9.9 DrugsUnilever 9.6 Consumer goodsCoca-cola 9.3 Soft drinksSysco 9.1 Food servicesForest Labs 8.5 DrugsEBay 8.2 E-businessPepsico 8.0 Soft drinksMedtronic 7.9 Medical equipment3M 7.8 DiversifiedProcter & Gamble 7.8 Consumer goodsFrance Telecom 7.6 TelecomSmith & Nephew 6.7 DrugsJohnson & Johnson 6.7 DrugsSource: BusinessWeek, July 2003The World’s Most Valuable Brands, 2003Rank Company Brand Rank Company Brand value value ($bn.) ($bn.) 1 Coca-Cola 70.45 11 Toyota 20.78 2 Microsoft 65.17 12 Hewlett-Packard 19.86 3 IBM 51.76 13 Citibank 18.57 4 GE 42.34 14 Ford 17.07 5 Intel 31.11 15 American Express 16.29 6 Nokia 29.44 16 Gillette 15.98 7 Disney 28.03 17 Cisco 15.57 8 McDonald’s 24.69 18 Honda 15.63 9 Marlboro 22.18 19 BMW 15.1110 Mercedes 21.31 20 Sony 13.15Source: InterbrandIdentifying Organizational Capabilities:A Functional ClassificationFUNCTION CAPABILITY EXEMPLARSCorporate Financial management ExxonMobil, GEManagement Strategic control IBM, Samsung Coordinating business units BP, P&G Managing acquisitions Citigroup, Cisco MIS Speed and responsiveness through Wal-Mart, Dell rapid information transfer Capital OneR&D Research capability Merck, IBM Development of innovative new products Sony, 3MManufacturing Efficient volume manufacturing Briggs & Stratton Continuous Improvement Nucor, Harley-D Flexibility Zara, Southwest AirDesign Design Capability Apple, NokiaMarketing Brand Management P&G, LVMH, PepsiCo Quality reputation Johnson & Johnson Responsiveness to market trends MTV, L’OrealSales, Distribution Sales Responsiveness PepsiCo, Pfizer& Service Efficiency and speed of distribution Amazon, Dell Customer Service Singapore Airlines Caterpillar The Value Chain: The McKinsey Business SystemTECHNOLOGYPRODUCT DESIGNMANUFACTURINGMARKETINGDISTRIBUTIONSERVICE The Porter Value ChainFIRM INFRASTRUCTUREHUMAN RESOURCE MANAGEMENTTECHNOLOGY DEVELOPMENTPROCUREMENTINBOUND OPERATIONS OUTBOUND MARKETING SERVICELOGISTICS LOGISTICS & SALESPRIMARY ACTIVITIESSUPPORT ACTIVITIESWINNING TEAMS 1998-2003EXPENDITURES ON KEY PLAYERS, 1998-2003Valencia (Sp)Pablo Aimar ($20.4m), Ruben Baraja ($12m)Real Madrid (Sp)Zinedine Zidane ($68m), Luis Figo ($55m), Ronaldo ($43m), Nicolas Anelka ($36m), David Beckham ($26m), Deportivo La Coruna (Sp)Sergio Gonzales ($16m), Alberto Luque ($15m)Juventus (It)Gianluigi Buffon ($49m), Pavel Nedved ($38m), Lilian Thuram ($33m), David Trezeguet ($21m), Marco de Viao ($10m) AC Milan (It)Rui Costa ($42m), Alessandro Nesta ($30m), Andriy Shevchenko ($24m), Andrea Pirlo ($16m), Kaka ($9m)Parma (It)Hidetoshi Nakata ($30m), Sdrian Mutu ($9m)Manchester United (Eng)Rio Ferdinand ($45m), Juan Veron ($42m), Ruud van Nistelrooy ($30m), Cristiano Ronaldo ($18m), Fabien Bartez ($12m), Diego Forlan ($10m), Kleberson ($9m), Mikael Silvestre ($6m) Arsenal (Eng)Sylvain Wiltord ($20m), Thierry Henry ($16m), Dennis Bergkamp ($12m), Nwankwo Kanu ($7m), Gilberto Silva ($7m), Patrick Vieira ($6m)Liverpool (Eng)Emile Heskey ($16m), El Hadji Diouf ($15m), Dietmar Hamann ($12m), Chris Kerkland ($8m), Harry Kewell ($8m), Salif Diao ($8m)HIGHEST EXPENDITURES ON NEW PLAYERS (Top 3in Spain, Italy & England)BarcelonaChelseaLazioManchester UnitedInter MilanJuventusAC MilanArsenalReal Betis Superior Resources do not necessarily mean Superior Capabilities: Transfer Fees and Team Performance in European SoccerNote: Spain, Italy &England only).The Architecture of Organizational CapabilitySKILLS &KNOWLEDGEVALUES & NORMSMANAGERIALSYSTEMSTECHNICALSYSTEMSDorothy Leonard “Core Capabilities & Core Rigidities”A modified viewRESOURCESHuman skills & know-howTechnologyCulture (values, norms)ManagementSystemsOrganizationStructureORGANIZATIONAL CAPABILITY A Hierarchy of Capabilities: A Telecom ManufacturerCROSS FUNCTIONAL CAPABILITIESBROAD FUNCTIONAL CAPABILITIESACTIVITY RELATED CAPABILITIES (Operations related only)SPECIALIZED CAPABILITIES (Manufacturing related only)SINGLE-TASK CAPABILITIES (Only those related to PCB assembly)INDIVIDUALS’ SPECIALIZED KNOWLEDGEScarcityRelevanceDurabilityTransferabilityReplicabilityProperty rightsRelative bargaining powerEmbeddednessTHE EXTENT OF THE COMPETITIVE ADVANTAGE ESTABLISHEDSUSTAINABILITY OF THE COMPETITIVE ADVANTAGEAPPROPRIABILITYTHE PROFITEARNING POTENTIALOF A RESOURCE ORCAPABILITY The Rent-Earning Potential of Resources and Capabilities ImportanceVW’s Relative StrengthC1. Product development94C2. Purchasing75C3. Engineering79C4. Manufacturing87C5. Financial management63C6. R&D64C7. Marketing & sales94C8. Government relations48 ImportanceVW’s Relative StrengthR1. Finance64R2. Technology75R3. Plant and equipment88R4. Location 74R5. Distribution 85RESOURCESCAPABILITIES Assessing a Companies Resources and Capabilities: The Case of VWRelative StrengthStrategic ImportanceSuperfluous StrengthsKey StrengthsZone of Irrelevance Key Weaknesses11510510R1R2R3R4R5C1C2C3C4C5C6C7C8 Appraising VW’s Resources and Capabilities(Hypothetical only)Appraising the Capabilities of a Business School (illustrative only)Relative StrengthSuperiorParityDeficientNot importantCritically important569324 8 1071C1 Alumni relationsC2 Student placementC3 TeachingC4.AdministrationC5 Course devlpmntC6 Student recruitmentC7 ResearchC8 Corporate relationsC9 MarketingC10 ITC11 PRC12 HRMImportanceKey weaknessesKey strengthsSuperfluousstrengthsInconsequentialweaknesses1112Amoco’s Appraisal of Organizational Capabilities(illustrative only)Relative StrengthSuperiorParityDeficientNot importantNeeded to playNeeded to win569423 11 101811. Effective deal making2. Rapid new product development3. Relentless cost forms4. Product quality5. JV management 6. Superior EH&S management7. Managing culturally diverse workforce8. Fast decision making9. Customer segmentation10.Capture synergies across divisions11. Effective procurementImportanceKey strengthsKey weaknessesSuperfluousstrengthsInconsequentialweaknesses72Distinctive Capabilities as a Consequence of Childhood ExperiencesCompany Capability Past HistoryExxon Financial Exxon’s predecessor, Standard Oil (NJ) management was the holding co. for Rockefeller’s Standard Oil TrustRD/ Coordinating Shell a j-v formed from Shell T&T founded toShell decentralized sell Russian oil in China, and Royal Dutch global empire founded to exploit Indonesian reserves BP “Elephant Discovered huge Persian reserves, went on to hunting” find Forties Field and Prudhoe BayENI Deal making in The Enrico Mattei legacy; the challenge of politicized managing government relations in post-war environments Italy Mobil Lubricants Vacuum Oil Co. founded in 1866 to supply patented petroleum lubricants Approaches to Capability DevelopmentLinking strategy to Human Resource Management—modeling & developing individual competencies Greenfield development in separate organizational unit (IBM & the PC, Xerox & PARC, GM & Saturn) Change management to transform values and behaviors (GE, BP)Product sequencing (Intel , Sony, Hyundai)Knowledge Management (e.g. lessons learned, best practices transfer, etc.)Product Sequencing to Build Capabilities: HyundaiAssemblyProduction engineeringLocal marketingAuto styling &designCasting & forgingChassis designToolingBody productionExport mktg.FWDengineeringCAD/CAMAssemblycontrolsystemsAdvancedcomponenthandlingHydrodynamicsThermodynamicsFuel engineering Emission controlLubricationKinetics& vibrationCeramicsElectronic controlsystemsLarge-scale design integrationGlobal logisticsLifecycle engineeringSKD CKDFord CortinaPonyAccentAvanteSonantaExcelProductsCapabilities‘Alpha’engine19681970197419851994-954. Develop strategy implications: (a) In relation to strengths--How can these be exploited more effectively and fully? (b) In relation to weaknesses --Identify opportunities to outsourcing activities that can be better performed by other organizations. --How can weaknesses be corrected through acquiring and developing resources and capabilities?3. Appraise the firm’s resources and capabilities in terms of: (a) strategic importance (b) relative strength2. Explore the linkages between resources and capabilities1. Identify the firm’s resources and capabilitiesSTRATEGYCAPABILITIESRESOURCESPOTENTIAL FOR SUSTAINABLE COMPETITIVE ADVANTAGESummary: A Framework for Analyzing Resources and CapabilitiesWhy the surge of interest in knowledge management (KM)? --kn. as the key resource of the firm --giving us a better understanding of management2) What is KM? 3) What progress have we made, what are the key gaps, which areas are likely to add most value? 4) Developing strategy: Exploiting strengths, protecting and eliminating weaknesses5) Building the capability base: Can it be done? How?6) What can be learn from Knowledge Management?7) Implications for organizational structure.OUTLINEKnowledge Management and the Knowledge-based View of the FirmKnowledge Creation ResearchKnowledgeAcquisitionKnowledge Generation(“Exploration”) Training Recruitment Intellectual property licensing BenchmarkingKnowledge Application(“Exploitation”)KnowledgeIntegration New product development OperationsKnowledgeSharing Strategic planning Communities of practiceKnowledge Storage & OrganizationKnowledge Replication Best practices transfer On-the-job training Databases Standard operating practicesKnowledge Measurement Intellectual capital accounting Competency modelingKnowledgeIdentification Project reviews Competency modeling Knowledge Processes within the OrganizationTOFROMTacitKnowledgeExplicitKnowledgeTacitKnowledgeExplicitKnowledgeSOCIALIZATIONSharing of tacit knowledge among individuals and from the organization to the individualEXTERNALIZATION The articulation and systematization of tacit into explicit knowledge. Use of metaphor to communicate tacit conceptsINTERNALIZATIONInstructions and principles are converted into intuition and routinesCOMBINATIONA key role of information systems is to combine different units of information and other forms of explicit knowledgeNonaka’s Knowledge Conversion MatrixWhat is Knowledge Management?Definition:“The systematic leveraging of information and expertise to improve organizational innovation, responsiveness, productivity and competency.” (Lotus division of IBM) I T On-the-jobTrainingNew Product DevelopmentBenchmarkingResearchCustomer &Market AnalysisIntellectual PropertyProtectionBestPracticeTransferCommunicationsScenarioAnalysisStrategic AlliancesIntellectualCapitalAccountingCourses & SeminarsT Q MLessonslearnedCRMData miningE R PIndividualOrganizationExplicitTacitInformationFactsScientific kn.DatabasesSystems & proceduresIntellectual propertySkillsOrganizational capabilitiesCRAFTENTERPRISES‘INDUSTRIAL’ ENTERPRISESTypes ofKnowledgeLevels of knowledgeKnowledge Types and Knowledge ConversionKnowledge Transfer MechanismsDISSEMINATIONBREADTHManyFewABILITY TO CODIFYHigh (explicitkn.. & informationLow (know-how &contextual kn..)PersonneltransferInternalconsultantsOn-the job trainingTrainingseminars&coursesCommunities-of-practiceCommunities -of-interestInformalvisitsDataexchangeShared databases E-mailGroup-wareTelephoneFaxVideoconferencingMeetingsRules, procedures & directivesManuals &reportsModular integrationDesigning a Knowledge Management System What kn. processes which are critical to creating value & competitive advantage? --Dow: creating and exploiting patents --McKinsey & Co.: sharing kn. & retaining experienced consultants --Accenture: systematization.) What are the characteristics of the relevant kn.? What mechanisms are needed for the generation and application of the relevant kn.? What organizational conditions need to be in place in order for knowledge management mechanisms to work? ---Organizational structures ---Incentives to contributors and users ---Behavioral norms and values