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CHAPTER 4

CHAPTER 4. GLOBAL t PENG. Chapter 4 LEARNING OBJECTIVES. After studying this chapter, you should be able to: Define resources and capabilities. Explain how value is created from a firm’s resources and capabilities.

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CHAPTER 4

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  1. CHAPTER 4 GLOBAL t PENG © 2010 Cengage Learning. All rights reserved.

  2. Chapter 4 LEARNING OBJECTIVES After studying this chapter, you should be able to: • Define resources and capabilities. • Explain how value is created from a firm’s resources and capabilities. • Articulate the difference between keeping an activity in-house and outsourcing it. • Explain what a VRIO framework is. • Explain how to use a VRIO framework to understand a firm’s resources and capabilities. • Identify three things you need to do (and one thing you should avoid) as part of a successful career and business strategy. © 2010 Cengage Learning. All rights reserved.

  3. SWOT ANALYSIS Strengths and Weaknesses – internal assessment of the organization leading to management decisions. Opportunities and Threats – external assessment of the business environment to identify the uncontrollable events that might impact management decisions. © 2010 Cengage Learning. All rights reserved.

  4. LO1: RESOURCES AND CAPABILITIES The tangible and intangible assets a firm uses to choose and implement its strategies. © 2010 Cengage Learning. All rights reserved.

  5. LO2: THE VALUE CHAIN © 2010 Cengage Learning. All rights reserved.

  6. LO2: TWO-STAGE DECISION MODEL © 2010 Cengage Learning. All rights reserved.

  7. LO3: LOCATION, LOCATION, LOCATION © 2010 Cengage Learning. All rights reserved.

  8. LO4: VRIO FRAMEWORK alue – do firm resources and capabilities add value? arity – how rare are the resources and capabilities? rganizational – valuable, rare and hard to imitate resources must be well organized. mitability – valuable and rare resources provide competitive advantage only if they are rare. © 2010 Cengage Learning. All rights reserved.

  9. LO5: USING A VRIO FRAMEWORK Resources and capabilities cannot be evaluated in isolation. The VRIO framework presents four interconnected and increasingly difficult hurdles for them to become a source of sustainable, competitive advantage. © 2010 Cengage Learning. All rights reserved.

  10. DEBATE: OFFSHORING FOR: Value for firms in access to low-cost, high quality labor. Allows firms to focus on their core capabilities. AGAINST: Offshoring nurtures rivals. Negative impact on developed economies. US firms not bound by American ethical values. © 2010 Cengage Learning. All rights reserved.

  11. LO6: THINGS TO DO FOR SUCCESS © 2010 Cengage Learning. All rights reserved.

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