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This session discusses the internal analysis of resources and competencies, focusing on value creation in shops and resources. It includes a discussion on the Wachtell, Lipton case and explores how they create value, their critical competencies, and their strategy.
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Session 4: Internal analysis of resources and competencies Knut Haanæs Associate Professor Norwegian School of Management - BI Knut Haanæs
Internal analysis of resources and competencies Value creation in shops and resources McKinsey as a knowledge intensive firm - a discussion Wachtell, Lipton case Guest lecturer: Hugo Maurstad, partner Knut Haanæs
Questions for Wactell, Lipton case • How does Wachtell, Lipton create value? • What are their critical competencies? • Do they have a strategy? -- In case they do: what characterizes their strategy? Knut Haanæs
Internal analysis of resources and competencies Value creation in shops and resources McKinsey as a knowledge intensive firm - a discussion Wachtell, Lipton case Guest lecturer: Hugo Maurstad, partner Knut Haanæs
The third value configuration The value chain The value network Source: Porter (1985); Stabell and Fjeldstad (1997) The value shop Knut Haanæs
The value shop * Solving unique problems * Different disciplines * No line; circle * Mostly primary activities * Reputation driven * Referrals and sub-contracting * Learning * Leveraging expertise Value shop SOLVE PROBLEMS Stabell and Fjeldstad (1997) Knut Haanæs
Activities in value shop Administration Consulting, Hospital, School, etc. Recruiting and competence development Technology development Purchasing PROBLEM IDENTIFICATION PROBLEM- SOLUTION CHOICE CONTROL/ EVALUATION DOING Solving unique problems! Stabell and Fjeldstad (1997) Knut Haanæs
3 types of problem solving Search Design Sorce: Stabell and Fjeldstad (1998) Diagnosis Knut Haanæs
Key aspects of strategy in value shops Growth rates Pricing Recruiting Methods Scope Leverage (delegation) Partners (referral network) Learning Reputation Knut Haanæs
Firm-specific resources Allocated and Traded Intellectual capital Mobilized and built RESOURCES Tangible resources Intangible resources Physical Financial Property-rights Relationship-based Competence-based Info. bases Reputation Image Knowledge Loyalty Skills Routines Loyalty Source: Haanes and Løwendahl (1997) Relations Aptitudes Culture Relations STRUCTURAL CAPITAL Controlled by organization HUMAN CAPITAL Controlled by individuals Knut Haanæs
Competence Knowledge Competence (“To know something that can be used to do something”) Skills Knut Haanæs
3 criteria for sustained competitive advantage NOT IMITABLE? VALUE? SCARCE? Source: Barney (1991) Knut Haanæs
2 strategic challenges NOT IMITABLE? VALUE? SCARCE? MOBILIZED? APROPRIATED? Knut Haanæs
Core competencies • Can give access to new markets • Lead to perceived advantages for customers • Integration of knowledge and skills • Limited number (5-15) • Take time to develop / built through doing • Difficult to understand / socially complex Knut Haanæs
Value creation and resources Value creation Competence Relations Flow Quality Reliability Efficiency Scale Quality Chain Reputation Referrals Sub-contracting Problem solving New combinations Mobilize competencies Shop Many relations to many customers Many co-operative / competitive partners Contracting Segmenting Communicating Network Knut Haanæs
Internal analysis of resources and competencies Value creation in shops and resources McKinsey as a knowledge intensive firm - a discussion Wachtell, Lipton case Guest lecturer: Hugo Maurstad, partner Knut Haanæs
