Strategic Management: Creating Competitive Advantages, Chapter 3: Assessing the Internal Environment of the Firm

Value-Chain Analysis
A strategic analysis of an organization that uses value-creating activities.
Primary Activities
Sequential activities of the value chain that refer to the physical creation of the product or service, its sale and transfer to the buyer, and its service after sale, including inbound logistics, operations, outbound logistics, marketing and sales, and service.
Support Activities
Activities of the value chain that either add value by themselves or add value through important relationships with both primary activities and other support activities; including procurement, technology development, human resource management, and general administration.
Inbound Logistics
Receiving, storing, and distributing inputs of a product.
All activities associated with transforming inputs into the final product form.
Outbound Logistics
Collecting, storing, and distributing the product or service to the buyer.
Marketing and Sales
Activities associated with purchases of products and services by end users and the inducements used to get them to make purchases.
Actions associated with providing service to enhance or maintain the value of the product.
The function of purchasing inputs used in the firm’s value chain, including raw materials, suppliers, and other consumable items as well as assets such as machinery, laboratory equipment, office equipment, and buildings.
Technology Development
Activities associated with the development of new knowledge that is applied to the firm’s operations.
Human Resource Management
Activities involved in the recruiting, hiring, training, development and compensation of all types of personnel.
General Administration
General management, planning, finance, accounting, legal, and government affairs, quality management, and information systems; activities that support the value chain and not individual activities.
Collaborative and strategic exchange relationships between value-chain activities either (a) within firms or (b) between firms. Strategic exchange relationship involve exchange of resources such as information, people, technology, or money that contribute to the success of the firm.
Resource-Based view of the Firm
Perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.
Tangible Resources
Organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources.
Intangible Resources
Organizational asses that are difficult to identify and account for and are typically embedded in unique routines and practices, including human resources, innovation resources, and reputation resources.
Organizational Capabilities
The competencies and skills that a firm employs to transform inputs into outputs.
Strategic Resources
Firms’ capabilities that are valuable, rare, costly to imitate, and costly to substitute.
Path Dependency
A characteristic of resources that is developed and/or accumulated through a unique series of events.
Casual Ambiguity
A characteristic of a firm’s resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created.
Social Complexity
A characteristic of a firm’s resources that is costly to imitate because the social engineering required is beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and customers.
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