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5. STRATEGIES
5.1. Strategic planning and management of culture
Observatorio Cultural del Proyecto Atalaya
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5.1 Strategic planning and management of culture
by José Ruiz Navarro
The strategic planning and management of culture, as any human activity, is based on the achievement of results. This chapter introduces the basic concepts and tools of strategy, distinguishes its main elements, analyses its evolution, and presents its challenges. Also, some examples related to the cultural field are provided.
1. Importance of strategy, strategic analysis model, and evolution of strategy
Strategy is the great work of the organisation. In situations of life and death, it is the Tao of survival or extinction. Its study cannot be neglected.
Sun Tzu
Introduction and objectives
Strategy is related to the achievement of results in any field of activity: social, economic or artistic. This first
section explains what strategy is and why it is important. Strategic management is distinguished from planning.
Strategy is not a detailed action plan or an instruction manual, but a unified plan which gives coherence and
meaning to the decisions of an organisation or an individual, thus simplifying the decision-making.
In this first section, the strategic analysis model and its two basic components are presented: the analysis of
the environment of firms (especially the industry analysis) and the analysis of their internal situation (mainly
their resources and capabilities). Also, a brief story of strategy is provided to have a temporary vision of it.
Finally, both the current meaning of “strategy” and a dynamic perspective of it are provided.
After reading this section, readers will be able to:
• Assess the contribution of strategy to the achievement of results, both for organisations and
individuals, and to know the elements of an effective strategy;
• Understand the basic strategic management model; and, • Familiarise with the changes of thoughts on business strategy throughout the last seventy years.
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Strategic planning and management: elements of successful strategies
The goal of strategic management is helping to win, to obtain satisfactory results in any activity. For this
reason, studying the role of strategy in success is important.
The case of Lady Gaga is a successful example of a woman in culture in which the basic elements of a strategy
solidly formulated and efficiently developed can be identified (see “Case 1.1 - Lady Gaga and Haus of Gaga” in
section “For Reflection”).
Lady Gaga is a creative artist, although she does not stand out for having an extraordinary talent. Her success
is not just because of luck. She suffered some setbacks (for example: the cancellation of her first recording
contract), but her abilities to face the events with criterion and flexibility were essential to her successes. Her
strategy was not a plan, although its actions were coherent and always based on a clear understanding of the
desirable goals and on a profound understanding of how gaining a competitive edge over her competitors.
A celebrity status is created by combining provocation, fashion leadership, and presence in mass media, with a
unique and different image capturing the attention of young people worldwide.
Five elements are highlighted in her success:
1. Consistent and long-term goals: She is committed to her professional goals and has pursued them
firmly.
2. Profound understanding of the competitive environment: She deeply knows the economic changes
of music business, the commercialisation potential of social networks, and the needs of young people
of her generation.
3. Objective appraisal of resources: She is very good at identifying and implementing the resources
available for her, and she is also aware of her limitations and of the need to access to other resources
obtained through the network and through the variety of talents of the Haus of Gaga.
4. Effective implementation: She is an active person and puts her ideas into practice, acts and
implements them effectively, heading an organisation which gives her support and help in the
decision-making and the daily operation.
5. Observation and monitoring of results: She closely monitors her business and controls the most
important aspects, continuously learning.
These remarks on Lady Gaga and the role of strategy in success can be observed in most scopes of human
activity. In war, arts, politics, sport or business, the success of individuals and organisations is seldom the result
of a random process. An initial superiority in capabilities or resources is not always a determinant factor.
Strategies created from the four elements described above almost always play an essential role. The elements
of the case of Lady Gaga can also be observed in other musicians, like The Beatles, Madonnna, or in artists,
such as Picasso. If we focus on the most distinguished people of any competitive activity in arts, politics,
business, (see Fortune 500) or on our friends and acquaintances, those with the greatest innate capabilities
have been seldom successful in their profession.
Success goes with those who strategically drive their career in the most effective way, generally by combining
the strategic elements mentioned above: they know the environment in which they act, and they learn quickly
the keys to develop; they know themselves; they know their resources, their strengths and weaknesses; and
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they do not only analyse or plan, but take action to implement their analysis with commitment, perseverance,
and determination.
Fig. 1.1 Elements of the Successful Strategic Management.
Source: Adapted from Dirección Estratégica: conceptos, técnicas y aplicaciones: R. Grant, 2014. Ed. Thompson.
The three first elements —goals, analysis of the environment, and analysis of resources— constitute the core
of what is traditionally called strategic planning or strategy formulation. However, no matter how brilliant or
detailed the planning is: if it is not possible to be implemented, it has no value. For this reason, strategy must
take action to be useful, also meaning organisation and management capabilities for its implementation and
subsequent monitoring and control, thus leading to the concept of strategic management.
Basic strategic analysis model: simplifying SWOT
The elements of successful strategy can be divided as follows: the firm and its environment, with strategy
being the link between them.
The firm includes four of these elements: goals and values (“clear, consistent, and long-term”), resources and
capabilities (“identification and objective appraisal”), organisational structure and monitoring and control
systems (“effective implementation and monitoring”).
This idea of strategy as a link between the firm and its environment has great similarities with the traditional
model SWOT, which systematises the strategic analysis in four categories: Strengths, Weaknesses,
Opportunities, and Threats.
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Fig. 1.2 Basic model: strategy as a link between the firm and its environment.
Source: Adapted from Dirección Estratégica: conceptos, técnicas y aplicaciones. R. Grant. 2014. Ed. Thompson.
Weaknesses and Strengths correspond to the internal analysis of the firm, and Threats and Opportunities to its
environment or external scope. However, as explained in the case 1.2 (“What does not work in SWOT” in
section “For Reflection”), dividing the internal and external factors into two categories is clearer and more
useful than dividing the SWOT model into four categories. As a result, the task of business strategy is
determining how the firm will deploy its resources in its environment (it will be pointed out below) to meet its
long-term goals and how the firm will be organised to implement such strategy and to establish a control
system.
The lack of coherence between the environment and the internal aspects of the firm is among the main
reasons for the failure of some companies. For a firm of the creative world such as Nintendo, having the
financial and technological resources required to keep competing at the same level with Sony and Microsoft in
the market for game consoles and video games will be crucial.
Brief story of business strategy
Military antecedents
As armies, companies need strategies for similar reasons: to give meaning and purpose, to deploy their
resources in the most effective way, and to coordinate the decisions of different people. Many concepts and
theories on business strategy have their origins in military strategy. The term “strategy” itself comes from the
Greek word strategia, which means “the command of an army”. However, the concept was not originated by
Greeks: the classic work by Sun Tzu, The Art of War, written approximately 500 years before Christ, is
considered the first treaty of strategy. NOTE: A. GALVANY (2012). Sunzi. El arte de la guerra. Direct translation
from Old Chinese into Spanish (8nd edition). Madrid: Trotta.
Military and business strategies share a series of common concepts and principles. The distinction between
strategy and tactic is among the most basic ones. Strategy is the plan for deploying resources to obtain a
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favourable long-term position; a tactic is a set of tasks to carry out a specific short-term action. Tactics are
related to the manoeuvres required to win a battle, whereas strategy should lead to victory in a war. Strategic
decisions have three common characteristics: they are important, they are a significant commitment of
resources, and they are not easily reversible.
However, they are great differences between the competition in businesses and a military conflict. The goal of
war is (usually) defeating the enemy. The purpose of the business competition is seldom so aggressive: most
companies limit their competitive ambitions, searching the coexistence with competitors rather than their
destruction.
From strategic planning to strategic management
During the fifties and seventies, directors started to witness increasing difficulties to coordinate decisions and
to keep the control of companies more and more big and complex. New techniques to appraise investment
projects (updating of cash flows) favoured reasonable decisions. Nevertheless, companies did not have tools
for making more complex long-term decisions. Strategic planning (also known as corporate long-term
planning) was developed at the end of the fifties for such purpose. Macroeconomic forecasts were the basis
for a new planning. Their more usual format was a document of five years of advance planning which
established the goals of the firm, collected forecasts on key economic variables (including demand, the firm’s
market share, incomes, costs, and margins), established priorities for the various products and business areas
of the firm, and allocated investments. In the mid of seventies, the big American and European companies had
created departments of strategic planning. The technique was extended to other organisations, reaching
public organisations later.
In the seventies and early the eighties, confidence in the planning was very questioned. The oil crisis of 1974
and 1979 started a new era of macroeconomic instability, whereas the international competition was
intensified by the entry of companies from Japan, Korea, and South-East Asia. The new turbulences implied
that companies could not plan their investments and resources five years in advance, that is, they could not
predict a so distant future.
The result was a change of emphasis, from planning to implementing strategy. The focus was not formulating
the firm's expansion plan in detail but selecting markets and appropriately locating the firm in them with
respect to their competitors. This transition from planning to what will come to be known as strategic
management was accompanied by an increasing interest in competition as a central characteristic of the
environment and in the maximisation of results.
This emphasis on strategy as the quest of results focused the attention on resources of profitability and their
relationship with the environment. The attention was therefore focused on the environment of the firm in the
last years of the seventies and in the eighties.
Strategy based on resources
In the nineties, the research on the strategic analysis on sources of profit moved from the environment to the
interior of the firm. Progressively, the resources and capabilities of the firm were considered the main
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resource of competitive advantages and the basis to formulate strategy. This emphasis, which is called vision
of the firm based on resources, represented a substantial change of the thought of strategy. The importance
given to resources and internal capabilities has led firms to identify their differences with respect to their
competitors and to design strategies to innovate and exploit such differences, instead of focusing on market.
New trends
In the 21st century, new challenges are still constituting strategic principles and the implementation of
strategy. Digital technologies have strongly affected the competitive dynamics of many industries, thus
creating the phenomenon of markets where “the winner takes all”. Technological changes and the increase of
global competition have resulted that strategy is less and less related to plans and more to the innovation, to
the quest of “blue oceans”, that is, spaces without being opposed in the market, and to the creation of value
and enterprising opportunities. * See The complexity of these challenges has resulted in that being self-
sufficient is not a viable option any more for most companies which more and more depend on strategic
alliances with other companies and social agents.
The financial crisis of 2008 strongly affected the strategy of companies and generated a new way of conceiving
its purpose. The disillusionment with excesses and abuses of market capitalism has renovated the interest in
corporate social responsibility, ethics, sustainability, creation of shared value, and the role of legitimacy in
long-term business success. NOTE: Robert Peston, The New Capitalism (London: Hodder & Stoughton, 2010).
The following figure sums up the main contributions to strategic management from mid-20th century.
Fig. 1.3 Evolution of strategic management.
Source: Dirección Estratégica: conceptos, técnicas y aplicaciones. R. Grant. 2014. Ed. Thompson.
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Strategy currently
What is strategy?
Strategy is the means through individuals or organisations achieve their goals. Table 1.1 (“Some definitions of
strategy” in section “For Reflection”) includes a series of definitions of strategy. The common idea is that
strategy is focused on achievement, implies allocation of long-term resources, and gives consistency to
decisions and actions.
As the environment of the firm is more unstable and uncertain, strategy is less concerned on the detailed
planning and more on guidelines for success. As more turbulent the environment is, the more required are
flexibility and response capacity to be incorporated in strategy. Consequently, strategy becomes more and not
less important.
Why do firms need a strategy?
This transition of strategy as a plan (formulation) to strategy as management (implementation and control)
raises the question of why firms (or any type of organisation) need a strategy. Strategy helps in the effective
management of organisations: firstly, by improving the quality in the decision-making; secondly, by facilitating
the coordination; and thirdly, by focusing organisations on achieving long-term goals.
Strategy improves the decision-making in several ways: It simplifies the decision-making as the number of
possible alternatives is reduced; the process of strategy formulation brings together and includes
understanding of the various individuals; and it facilitates the use of analytical tools.
Strategy as a coordination mechanism: The main challenge of management is the coordination of actions of
the different members of the organisation. The process of strategic planning represents a forum where points
of view are exchanged, and agreements are reached.
Strategy as goal: Strategy consists in building a future. It deals with how the firm will compete and what it will
be in the future. It gives orientation to the development of the firm and establishes aspirations which motivate
and inspire members of the organisation. The challenge of the President Kennedy for the NASA is well known:
“[...] achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to
the earth”.
The development of strategy: stable environments and uncertain environments
The starting point of strategy is the idea of opportunity. In most small firms, strategy is generated and kept in
the mind of owners: an explicit plan of strategy is not usually required. The planning carried out by big firms
from the seventies was very formal. However, strategy also arises from adapting to circumstances. In the case
of Lady Gaga, there is a coherence and a pattern in her professional decisions which are identified as
strategies, despite not having a formal plan. Also, the most successful firms are not the result of big strategic
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plans. In August 2011, Apple surpassed Exxon Mobil as it became the most valuable company in the world. The
success of Apple is based on a strategy of the creation of consumption electronic products including hardware,
software, and aesthetics to create an experience for the user which is characterised by simplicity and intuitive
functionality. Its success is the result of perceptiveness, intuition, experimentation, and events.
These aspects raise the question of how firms and other types of organisations should develop their strategy.
An option is that directors try to formulate strategy through a rational systematic process, whereas the other
would imply that, in a turbulent world, it is preferable to respond to events by keeping sense of direction
rather than keeping general goals and orientations. Figure 1.4 describes the tension required between the
current competitive achievement and the continuing need to prepare or create the future. The degree of
attention to each alternative will depend on the stability or turbulence of the environment.
Fig. 1.4 Business strategy: balance between what we are and what we want to be.
Source: Adapted from Dirección Estratégica: conceptos, técnicas y aplicaciones. R. Grant. 2014. Ed. Thompson
The Catholic Church and the Louvre Museum are in relatively stable environments as they can plan their
activities and allocations of resources for the future precisely and in advance. For WikiLeaks or bands of Somali
pirates, to the contrary, strategic planning is limited to some guidelines; most of their strategic decisions are
responses to the surrounding circumstances.
The more turbulent and less predictable the business environment is, the less strategy is based on detailed
decisions and more on general guidelines and orientations when using “clear rules”. For example, Lego
evaluates the new proposals of products through some simple questions: Does the product look like Lego? Are
children learning while they are enjoying? Is creativity stimulated?
These rules or criteria guiding the strategy of the firm can be found in three places: in the mind of directors, in
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the strategy formulations carried out by them in their speeches and written documents, and in their decisions.
These statements related to strategy generally distinguish the following elements:
• Mission, which describes the purpose of the organisation and tries to respond to “why we exist”;
• Principles or values, which establish “in what we believe and how we will behave”;
• Vision, which reflects “what we want to be”; and,
• Specific strategy, or competitive plan of the firm, which generally proposes goals, business scope, and
advantages. D. J. Collins and M. G. Rukstad.
Summary of the first section:
• Strategy is an essential ingredient for the success of individuals and organisations. A solid strategy
does not guarantee success but increases its chances.
• Strategic management is made up of five basic elements: clear, consistent, and long-term goals;
profound understanding of the environment; smart appraisal of resources and capabilities; effective
implementation; and control of results. The phase of planning or strategy formulation corresponds to
the first three elements.
• Strategic management, in uncertain and competitive environments, is identified with the quest,
creation, and exploitation of opportunities of value creation.
• Developing a strategy of an organisation requires the dynamic balance between what we are and
what we want to be, between the plan guided by a rational purpose and the flexible and creative
response to changing circumstances.
2. Foundations of analysis of the environment: the industry analysis
I am I and my circumstance
José Ortega y Gasset
Introduction and objectives
This section explores the environment of the firm. The profound understanding of the competitive
environment is an essential element of a successful strategy, including the identification of the sources of
profit in the environment. The nearest environment of the firm is its industrial environment, so the final aim of
analysing the environment is the analysis of the industry to which the firm belongs.
To decide the industry of activity in which the business activity is going to be developed, it is worth evaluating
the attractiveness of the various industries in relation to their potential profitability and understanding that
the competitive structure of the industry determines it. The most used model for this purpose is the Porter’s
Five Forces of Competition framework.
Also, strategy must establish competitive advantages related to the key success factors of the sector.
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The added value of this section is as follows:
• Understanding that the industry represents the nearest environment of the firm and that it
characteristics are essential components for the strategic analysis;
• Learning to identify the structure of an industry and how it influences the intensity of competition and
profitability;
• Identifying the opportunities to obtain a competitive advantage in an industry by using the key
success factors.
From the analysis of the environment to the industry analysis
The famous sentence by Ortega y Gasset sums up well the essence of strategy. The personal identity or the
identity of the firm coming from strategy is the result of the “I” (resources and capabilities of the firm or of the
person) and of his/her circumstances (the environment). The foundations of the business environment taking
place in the industry analysis are studied in this section. Resources and capabilities are analysed in the next
section.
The environment of the firm is made up of all external factors influencing its decisions and results. For
example: the influences of the environment can be classified according to their origin as political, economic,
social, and technological factors— which is known as PEST analysis. Nevertheless, this wide exploration implies
a high cost and may turn to complexity and excess of information.
An effective analysis of the environment should distinguish what is vital for the firm to have profits. The
analysis should create value for customers, understanding what they want. Secondly, to create value, the firm
acquires goods and services from its suppliers, so it should know them and manage its interests with them.
Thirdly, the ability to generate profits depends on the intensity of the competition between firms competing
for the same opportunities of value creation, so the firm should also know the competition. In short, the
profits of firms in an industry are determined by three factors:
• The value of the product or service offered for customers;
• The intensity of the competition;
• The bargaining power of producers against their suppliers and customers.
The industry analysis includes these three factors in a unique analytical model.
Analysis of the industry attractiveness
The premise of the industry analysis is that the level of profitability of the industry is not a consequence of
chance but is determined by the industrial structure itself (see Tables 2.1 and 2.2 in section “For Reflection”).
Table 2.2 identifies four structure variables affecting competition and profitability. Michael Porter, from
Harvard Business School, developed the model of five forces in his book “Competitive advantage” to analyse
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the profitability of an industry. The five competitive forces include: threats of firms wanting to enter the
industry, substitute products, rivalry of firms which are in the industry, the bargaining power of suppliers, and
the bargaining power of customers:
Fig. 2.1 Porter’s five forces model.
As Figure 2.2 shows, the intensity of these forces is determined by several structure variables:
Fig. 2.2 Structure determinants of the five forces of competition framework.
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The most outstanding determinants are explained below:
Threat of entry of new competitors If new competitive firms can entry an industry and there are no barriers, the profit ratio will decrease until
making it unattractive. The main sources of entry barriers are as follows:
Investment required
The capital required to be established in an industry may be so high that it deters even huge firms. In service
industries —unlike industrial industries—, initial costs are generally low. For example, the cost of opening a
franchise pizza restaurant oscillates between 150,000 dollars for Domino’s to almost 638,000 dollars for Pizza
Hut.
Economies of scale
High investments, and therefore the high capital, for new competitors are sources of economies of scale
(reduction of the unitary cost of production as the volume of production increases) which favour the firms with
those investments.
Absolute cost advantage Absolute cost advantages usually come from the acquisition of sources of low-cost raw materials.
Product differentiation
In an industry where products are differentiated, the established firms have the advantage of the recognition
of the brand and the faithfulness of consumers. This source of barrier is basic in the firms related to the
intangible resources of the cultural industry.
Access to distribution channels
For many new suppliers of consumption goods, the main entry barrier is probably the obtaining of distribution
channels. A limited capability of distribution channels. One of the most important consequences of Internet is
that it allows new firms to neglect distribution barriers, which is basic in the cultural industry.
Administrative and legal barriers
In industries such as taxis, banks, telecommunications, and television, obtaining a licence provided by the
public authorities is usually required to enter. Industries which are intensive in knowledge, patents, copyrights,
and other ways of intellectual property legally protected are the most effective entry barriers.
Reprisals
Entry barriers also depend on the expectations of entrants on the possible reprisals taken by the firms
consolidated in the industry: drastic price decreases, increase of publicity, promotional sales or even lawsuits.
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Rivalry between competitors
It is the main determinant factor of the overall situation of competition and of profitability levels. In some
industries, firms fiercely compete even reducing prices under costs, thus leading the industry to general losses.
In other industries, there is no price competition: rivalry is focused on publicity, innovation, and different
dimensions of price. It is the result of the interactions between the six factors described below.
Concentration
Offer concentration refers to the relative number and size of competitors in a market. In markets controlled by
a unique firm (for example, Gillette, from P&G, in razor blades, or Apple in MP3 players), the dominant firm
can exercise a considerable discretion in price fixing.
Diversity of competitors
The degree in which firms of an industry can avoid the price competition depends of their similarity in terms of
origins, goals, costs, and strategies. The greater the diversity, the smaller the rivalry.
Product differentiation
The more similar the offer between competitors is, the more willing consumers are to replace some products
with others and greater the incentives of firms are to reduce prices to increase the sales. When the products
offered by rival firms are almost the same, the product is a commodity or a standardised product. Ideally is to
be so different to be unique in the market (to find or create a “blue” market, whereas the others are in “red”
markets).
Excess capability and exit barriers
Why the profitability of an industry tends to drastically fall during recession periods? The key lies in the
balance between demand and capability. The idle capability, if exit barriers exist, encourages firms to reduce
prices to attract new businesses. Exit barriers are costs associated with the possibility of leaving the industry.
Cost conditions: economies of scale and the relationship between fixed and variable costs.
When the excess of capability produces price competition, how low can prices be? The key factor is the cost
structure. When fixed costs are relatively high with respect to variable costs, firms will accept marginal
operations at any price covering their variable costs.
Bargaining power of buyers and suppliers
The firms of an industry compete in two types of markets: in those of productive factors and in those of
products. In markets for productive factors, firms buy raw materials, components, financial resources and
labour; in markets for products, firms sell customers goods and services (customers can be distributors,
consumers or another manufacturers). The way in which this value is divided, in terms of profitability, depends
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on the relative economic power of each one.
Positioning of the firm
The identification and understanding of competitive forces that a firm faces in its industry allow to be located
where the competitive forces are weaker. The record industry, which depended on CDs sales, has been
destroyed by the substitutes (digital download, piracy, and the use of shared files). However, not all segments
of the record business have been affected in the same way. Old people are not willing to use digital download,
unlike young people, so classic music, country music or the great hits have relatively become more attractive
than pop and hip-hop genres.
To have an effective positioning, the firm must anticipate the changes in the forces of the competition which
may affect the industry. Traditional bookshops have been removed by online retailers, such as Amazon and
electronic books. The survivors are the bookshops who took positions to avoid the powerful forces of the
competition, for example, by creating new sources of profit, such as coffees and the organisation of events
where they charge an entrance fee.
Identification of key success factors
The model of the five forces allows the potential of an industry to be determined to obtain profits, but it does
not indicate how the various firms competing in the industry divide such profits. This section explicitly analyses
the sources of competitive advantage within an industry.
To survive and prosper in an industry, a firm should combine two criteria: firstly, offering customers what they
want to buy; and secondly, surviving the competition. As a result, two questions need to be answered:
• What do customers want?
• What does the firm need to do to survive the competition?
To answer the former, identifying their customers is essential, as well as finding out their requirements and
how they choose between the various rival offers. After knowing the logic of the customers’ choice among the
different options, factors leading a firm to success can be identified.
The second question requires that the firm examines the foundations of the competition in the industry to
determine the degree of intensity of the competition and their key dimensions.
Figure 2.3 shows a basic model to identify the key success factors:
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Fig. 2.3 Identification of key success factors
Source: Dirección, Estratégica: conceptos, técnicas y aplicaciones. R. Grant. 2014. Ed. Thompson.
The following table shows the successful factors affecting the fashion industry:
However, common successful factors do not imply that firms in a same industry should adopt similar
strategies. The main firms of the industry —Inditex (Zara), H&M, Diesel, and Mango— have adopted unique
strategies to exploit such successful factors.
Nevertheless, the industry analysis has limitations which are more evident in dynamic and quickly changing
environments. The influence of new technologies, particularly information and communication technologies
(ICTs) have collapsed such limits. This is evident in the cultural industry, or more specifically, in sectors of
cultural industries (see “Case 2.1 - Diffuse limits of the cultural industry” in section “For Reflection,).
Summary of the second section:
• Despite the huge number of external influences affecting each firm, the attention to the analysis of
the environment is focused on the industry. The goal is estimating the potential of profits of the
industry and identifying the sources of competitive advantages that the firm may have.
• The key piece of this analysis is the Porter’s five forces of competition framework, which associates
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the structure of an industry with the intensity of the competition and the profitability it can offer.
• The main use of the five forces model is anticipating the way in which the changes in the structure of
an industry could affect its profitability.
• The industry analysis makes a first approach to identify the sources of competitive advantage through
the recognition of the key success factors of the industry.
3. Internal analysis: resources and capabilities
It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.
Charles Darwin
Introduction and objectives
Among the five successful elements of a good strategic management listed in the first section, the internal
aspects of the firm, its resources and capabilities have become very important in recent years. The resources
or capabilities of a firm —or those available for the firm— allow more competitive and solid strategies to be
formulated. Resources and capabilities, organised in routines, are considered the basis of strategy. Their
organisation and development determine the success of implementing the strategy and its results. The
capacity to renovate them depends on the change management, that is, on the overcoming of inertia and on
the enterprising spirit.
After reading this section, readers will be able to:
• Identify and appraise the resources and capabilities of a firm;
• Assess the potential of resources and capabilities of a firm to provide a sustainable competitive
advantage;
• Contemplate the importance of generating dynamic capabilities and of the change management.
Importance of resources and capabilities
The strategic plan of the firm has answered the following question: Which is our business? Traditionally and
from a market’s point of view, this question leads to other questions: Who are our customers? Which
requirements do we intend to meet?
However, in a world where customers’ preferences are volatile and their identity and technologies are
changing, a strategy focused on market may not to provide the stability and consistency needed to guide a
long-term strategy. For this reason, when the environment is very uncertain, the internal analysis of the firm,
the analysis of its resources and capabilities is a more solid starting point to establish the strategy.
A resource can be defined as an asset or stock, for example, a machine, a patent, a brand, or a building.
Resources are usually included in the balance of assets of the firm. Unlike resources, capabilities are sets or
flows of resources working together: they produce economic performance in the firm. The more flows are
repeated, the more effective they are, so organising them in organisational routines is fundamental. Some
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examples of capabilities are: the process of buying raw materials, the ability to create new 3M products, and
the various sets of tasks to put on a theatre play (rehearsals, costume designs, sceneries, etc.).
A solid strategy is that recognising its internal strengths and weaknesses, exploiting strengths and minimising
weaknesses, as in the case of Lady Gaga (Case 1.1 in section “For Reflection”). People and organisations have a
good strategy of identifying and developing their resources and capabilities as a starting point.
There are other examples reflecting this statement. Apple expanded beyond its initial specialisation in
computers (iPod, iPhone, iPad) because of its capacity to combine resources and capabilities (technology,
aesthetics, and ease of use). Thanks to its resources and capabilities, Apple influenced markets and was the
first firm in the world by market value in 2013. To the contrary, firms trying to maintain a market approach
have witnessed great difficulties, as the case of Eastman Kodak. A more recent example of how the origin and
development of a firm in culture are based on resources and capabilities is the firm ERA (Case 3.1 - ERA in
section “For Reflection”). It is clear that, without the resources and capabilities of its founders (knowledge of
archaeology, relationships, reproductions, etc.), the firm would not have been able to compete.
To sum up:
• The resources and capabilities of a firm are a more secure basis to create a strategy than the exclusive
attention to market, particularly in uncertain environments under rapid changes;
• They constitute the main source of profitability; as a last resort, what a company knows to do (its
capabilities) is what makes it valuable; and,
• Identifying and developing resources and capabilities show the way to achieve the unique personality
and character given by the strategy.
Identifying resources
The resources of a firm can be divided into three categories: tangible, intangible, and human resources. A first
partial vision of them can be obtained from the firm’s balance sheet.
Tangible resources. These resources are the easiest to be identified and appraised because of their material
nature (equipment, machines, grounds, buildings, liquid assets, etc.). They are generally valued in the balance
sheet of the firm, but such balance sheet gives little information concerning their potential.
Intangible resources. Intangible or immaterial resources are generally more valuable than tangible resources,
particularly in certain industries such as culture, where creating meanings is usually linked to the symbolic
character of the resources and capabilities of the firm. Most of them are not included in the financial
statements of companies. Assets related to reputation (brands, whose value lies on the confidence given to
customers, suppliers, and partners), technology, intellectual property in the form of patents, copyrights, and
commercial secrets whose property and use are regulated by law are among the intangible resources.
The importance of managing intangible resources is increasing and shows the junction of industries. An
example is the recent recruitment of Ángela Ahrendts in Apple (see “Case 3.2 - Apple and Ángela Ahrendts" in
section “For Reflection”), which highlights how the first technological firm of the world pays a special attention
to the management of its intangible resources by recruiting a person from the fashion world.
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Human resources. These resources are the abilities and productive effort offered by the employees of an
organisation. They are not included in the firm’s balance sheet because the firm acquires the services of
people under employment contracts. They are part of the resources of the firm because of their stability.
Organisations make a considerable effort to appraise their human resources, both at the hiring stage and in
the appraisals of performance and career planning.
Identifying organisational capabilities
Resources are not productive by themselves. Daniel Barenboim would not been able to conduct an orchestra
without all people, resources and technical equipment accompanying him in concerts. An organisational
capability is the ability of the firm to work its resources to obtain the desirable result (see “Case 3.3 - Football
and capabilities” in section “For Reflection”).
Firms need to have a general vision of their organisational capabilities. To achieve this, organisational
capabilities can be divided into functional areas. For example: managerial capabilities under financial control,
international management, and acquisitions; operational capabilities in continuous improvement or
production flexibility; and capabilities of research, development of new products, etc.
Making an inventory of organisational capabilities is more difficult than of resources. Each firm has unique
capabilities difficult to be identified with simple functional classifications. Apple is a good example: it has a
notable capacity to combine hardware, software engineering, aesthetics, ergonomics, and cognitive
knowledge.
Appraisal of resources and capabilities
After identifying the resources and capabilities of a firm, the next step is appraising its strategic importance.
Having a guideline or criterion which identifies the strategic resources and capabilities simplifies the work of
the entrepreneur or director to pay a priority attention to the most relevant.
A practical and simple method is observing whether the four requirements VRIO are fulfilled, that is, Valuable,
Rare, Costly to Imitate and Organised to Capture Value, thereby answering the following questions:
• Are they Valuable and generate opportunities in market?
• Are they limited or Rare and they are not available for all competitors?
• Are they difficult to Imitate and are not easily reproducible by other firms?
• Do they work together with other resources of the Organisation and increase their performance
when they complement each other?
The Value of the resource or capability should be related to key success factors in the market and generate
opportunities. These factors will depend on the characteristics of industries and of the dominant technology.
The Shortage is another parameter to consider. If a resource or capability is plentiful in the industry —for
example, water for agriculture—, it can be fundamental to compete, but it does not give an enough basis to
obtain a competitive advantage if it is available for a huge number of firms.
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Thirdly, a resource or capability can be valuable and limited, but not strategic. An additional condition is not to
be easily reproducible or imitated by the competition.
Finally, even fulfilling all these conditions, there is an additional requirement to consider the strategic
importance of the resource or capability: to be able to generate synergies with other resources and capabilities
by working immersed in the Organisation, thus complementing and improving the abilities of other resources,
as well as providing value. The case of sport teams is paradigmatic. It is not enough with having Messi (a
valuable, limited, and inimitable resource as footballer) to manage Barcelona C.F. strategically: it is necessary
to be integrated in the team and to produce a synergy effect with his workmates and the technical team.
A dynamic vision of resources and capabilities: implementing and monitoring strategy
Strategy as the result of the mixture between the industrial environment (“my circumstances”) and resources
and capabilities (“I” in the sentence by Ortega y Gasset) cannot be limited to a static idea. Its Implementation
and control (the other two requirements mentioned in section Strategic planning and management: elements
of successful strategies (see figure 1.1) require a dynamic vision of strategy. Such idea has the answer in the
creation of dynamic capabilities by the organisation: capabilities developing over time and allowing the firm to
be changed and adapted to the evolution of the environment and to cause changes in it.
This dynamic vision of strategy is supported by the change management and is closely linked to innovation
processes. However, the implementation of strategy and its subsequent control require to overcome the
resistances to the change existing in all organisations. To overcome the organisational routines created, which
generated efficiency and to which resources have been adapted. It requires to be continuously on the alert to
reformulate strategy and to start reinventing the organisation. For this reason, managing an organisation
strategically consists in combining the exploitation of what we know to do and the continuous search of new
opportunities.
Figure 3.1 sums up a practical guideline for a well management. Fig. 3.1 Exploiting resources and capabilities: a practical guideline for strategy
Sources: Prof José Ruiz Navarro.
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From this perspective of continuous change —of exploitation and search—, strategic management should be
continuously ready for five tasks:
1. It should be able to identify the resources of the firm;
2. It organises them by capabilities responding to what the firm better knows to do.
3. It focuses the attention on strategic capabilities (those built under VRIO criteria) to be unique, thus
giving competitive advantages and achieving more results than the competition.
4. It continuously controls the results related to both goals and the changes produced in the
environment and suggests the changes to be included in the strategy.
5. The goal of changing keeps a dynamics which alerts the organisation and encourages it to develop
new resources and capabilities to start a new cycle.
Inertia to change and enterprising spirit
This managerial task of formulating the strategy and putting it into practice faces the challenge of overcoming
inertia to the change existing in all organisations and those faced by the management every time a project is
undertaken to exploit a new opportunity. Inertia can be grouped in five main categories related to the
distortion of vision, interest, the capacity to find creative responses, political pressures, and the coordination
capability.
1. The distortion of vision responds to perception problems. It is the first barrier to change as people reject its need, they do not see it.
The distortion can be originated from short-sightedness or inability to perceive opportunities or
threats, to see reality and tendencies clearly. Short-term attention of some entrepreneurs makes
them not to circulate with “high beams” and not to perceive signs of change in the variables
conditioning the future.
Very detailed plans of some organisations and their rigid observation also contribute to the inability of
observing what is going on around. They usually generate an everyday thought producing an excess of
orthodoxy and conformism (in some mature industries, for example, shipyards, the sentence “the
naval industry will be always the same” is usually listened; the same happens in some traditional
culture industries which reject innovation systematically).
A third reason for the everyday thought which prevents to see the need of change is the excess of
confidence (“to die from success” is possible). History, past successes refuse current risks. General
Motors did not accept that Japanese cars manufacturers were more productive. The captain of Titanic
even affirmed that the ship was unbeatable.
2. The lack of interest is usually the second barrier for change. After overcoming the previous barrier, the second barrier takes place when, being aware of the need to change, psychological or agency problems arise, thus preventing the change.
These agency problems —problems of interests found in the organisation— are originated from the
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direct cost of change: for example, when a new technology renders obsolete the previous one so that
the existing machines or equipment are not valuable any more (“sunk costs” or irrecoverable
expenses are produced).
Also, new opportunities generating change produce losses of current markets. This is what happens
with “cannibalism”: a new brand of the firm takes the place of or “eats” the previous brand.
The existence of grants or incomes from other activities do not foster the change, especially when the
process of change implies that the performance is not the same, particularly in the beginning (for
example, the launching of a new product does not cover all the investments required, which will be
recovered in a longer period).
3. The lack of creative response is a barrier which prevents to change even when the two previous barriers are overcome. It is a barrier related to problems of capability of analysis or of decision-making.
The speed and complexity of change sometimes hinder the capability of analysis. The crisis and its
intensity are beyond some entrepreneurs and directors.
Fatalism and passivity are other reasons of the lack of active response to the changes of the
environment. Expressions such as “problems are inevitable” or “nothing can be done” are the origins
of passive behaviours.
The lack of an enterprising spirit able to assume challenges to look for and to create opportunities, as
well as to assume risks is also among the main ingredients of the lack of responses to change. This
lack of culture focused on undertaking is generally linked to the belief that others will solve problems.
But paralysis and not generating proposals can also be based on distrusting the vision proposed from
the orientation of change. A horizon of future stability is not created, promises of participation are
not believed, and a long-term commitment is not generated.
4. The political conflict generates a gridlock in decisions, thus preventing to implement strategies although the three previous barriers are overcome.
Policies of groups belonging to departments with different interests (change produces winners and
losers among groups or departments). Irreconcilable beliefs on the nature of the problem of its
solutions stop the change. Participatory decisions and the impossibility of reaching consensus
sometimes require decisions linked to leadership: “If the ship sinks, managing by consensus is worth
nothing”.
In other cases, values generate value curves which turn into obstacles: the more a task is repeated,
the more valuable it is thought to be (when everything changes, experience can be an obsolete
resource).
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5. After overcoming the previous barriers, the lack of coordination in action can lead to the failure of implicit change that implementing the strategy implies.
The most common reasons are a leadership committed to previous commitments and fears to break
links with former workmates (the external or internal origin of management teams is aware of these
aspects).
The capacity to establish new incentives to acquire new routines (such as encouraging a framework
for innovation) is another reason. Problems of “first moving” common expectations are also another
reason to stop the action (to wait what another person does).
Finally, the lack of management and leadership capabilities undoubtedly compromises the processes
of change. An instructive case of how managing a difficult process of change, of how undertaking a
project and implementing a strategy is the case of Nelson Mandela (see “Case 3.4 - Nelson Mandela’s
lessons” in section “For Reflection”).
Final summary
Strategy is based on the achievement of results. For this purpose, the resources and capabilities available for
the organisation constitute a solid basis to formulate strategies (planning) which can be put into practice
(implementation), especially in uncertain environments where markets and technologies rapidly change. Apart
from the analysis of the environment —the industry analysis— of the firm, the management of resources is
another pillar of strategic management.
The management of resources requires a correct identification and appraisal of the strategic potential of the
resources of firms. The strategic character of resources and capabilities comes from their potential to isolate
the organisation from the competitive pressure of the environment, that is, from their property to give a
unique character against competition.
However, the existence of resources and strategic capabilities as a required condition for the organisation or
firm to reach the achievement is not enough. Strategic management should be able to implement the strategy,
to control its results and to renovate it. Implementing, controlling, and supervising the strategy means to
overcome inertia to the change, to identify new challenges, and to undertake new projects. This capacity to
explore new horizons, to identify or create opportunities, to organise resources to exploit them, and to
appraise the results continuously are the essence of strategic management.
For Reflection
Section 1. Importance of strategy, strategic analysis model, and evolution of strategy
Case 1.1 Lady Gaga and the Haus of Gaga
Stefani Joanne Angelina Germanotta, known as Lady Gaga, is the most popular and successful artist from the
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21st century. After launching her first album, The Fame, in 2008, she obtained a sales record with 42 million of
discs and was a great success in the main musical awards, including The Grammys, the MTV awards, and the
Billboard Music Awards. In 2011 she ended a worldwide tour of 201 concerts raising 227.4 million of dollars
(the highest figure for a new artist) and headed the list of celebrities of Forbes Celebrity 100.
Gaga’s music is a mix of catchy pop music and dance, but it is unlikely to be outstanding or innovative. The
critic Simon Reynolds described her as “ruthlessly catchy, naughties pop glazed”. Her successes have been
notably promoted by their dazzling videos. Paparazzi and Bad Romance won the award for best video in the
Grammys 2009 and 2010: the latter is the second most downloaded video of all times in YouTube. The most
surprising aspect has been the clothing and general appearance of Lady Gaga, she met with the president
Obama wearing a shoe with 16 inch-heel, so known as her successful songs.
She has developed a business model which recognises the reality of the post-digital entertainment world. Her
records go with, or sometimes are preceded by musical videos in YouTube. Famecount has crowned her as
“the most popular living musician online”. Her interaction with her fans includes Gagaville, an interactive game
developed by Zynga and The Backplane, a social network based on music.
Her emphasis on the visual image reflects the way in which her fame has turned into money. A distinctive
characteristic of developing Gaga’s market is the emphasis given to the creation of relations with her fans and
her social and non-conformist statements. The meaning of community is enhanced by mechanisms, such as
the greeting “Monster Claw” and the “Manifesto of Little Monsters". As "Mother Monster”, Gaga is the
spokesperson and guru of such community.
Following the model of the Factory by Andy Warhol, the Haus of Gaga is her creative workshop and develops
her own capabilities. The Haus of Gaga includes the director Troy Carter, the creative director and
choreographer Laurieann Gibson, and a huge professional team that Gaga uses in her public appearances.
Sources of the case of Lady Gaga:
en.wikipedia.org en.wikipedia.org, consulted 7 January 2014 See the case in detail in the book: Dirección estratégica: conceptos, técnicas y aplicaciones. R. Grant, 2014. Ed.
Thompson.
Case 1.2 - What does not work in SWOT Distinguishing between the environment and the internal characteristics of the firm is a common premise in
most approaches to the strategic analysis. The most known and widely used is the SWOT model, which
classifies the factors influencing a business strategy in four categories: strengths, weaknesses, opportunities,
and threats. The two first categories (strengths and weaknesses) refer to the internal aspects of the firm, and
the other two (opportunities and threats) refer to the environment.
The question is whether a distinction between external and internal factors or the SWOT taxonomy with four
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components is the most appropriate. The key question is knowing whether classifying the internal factors as
strengths and weaknesses and the external factors as opportunities and threats is reasonable and useful. In
practice, such distinctions are difficult.
Michael Eisner came to Walt Disney Productions in 1984 as president, the firm was in its fourth consecutive
year of decline in net incomes, and the price of its stocks had fallen in a very attractive way for predators.
Between 1984 and 1988, the sales of Disney increased from 1.660 to 3.750 million of dollars, net profits
increased from 98 million to 570 million, and the market value of the firm increased from 1.800 to 10.300
million of dollars. But, over time, Eisner’s strength, because of his age, turned into a weakness and excessive
dependence for the firm.
Global warming is at the same time a threat and an opportunity for car manufacturers of the world: it is a
threat by increasing the taxes on fuel and limiting the use of cars, and it is an opportunity for new sales by
encouraging consumers to change their cars and to buy fuel-efficient and electric cars.
The lesson is that classifying external factors in opportunities and threats and internal factors in strengths and
weaknesses is arbitrary. The external and internal forces affecting the firm should be carefully identified, and
then their consequences should be analysed.
Source: Dirección estratégica: conceptos, técnicas y aplicaciones. R. Grant, 2014. Ed. Thompson
Table 1.1 - Some definitions of strategy “Strategy: a plan, method or series of actions designed to achieve a specific goal or effect”. Wordsmyth Dictionary (www.wordsmyth.net) “The determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”. Alfred Chandler, Strategy and Structure (Cambridge, MA: MIT Press, 1962)
“Strategy is the pattern of objectives, purposes or goals and the major policies and plans for achieving these
goals, stated in such a way as to define what business the company is in or is to be and the kind of company it
is or is to be”.
Kenneth Andrews, The Concept of Corporate Strategy (Homewood, IL: Irwin,1971) Lost child: “Come on! We’ll get ‘em”. John Darling: “First, we must plan our strategy”. Lost child: “Uh, What’ strategy?” John Darling: “A plan of attack”.
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Walt Disney, Peter Pan Source: Dirección estratégica: conceptos, técnicas y aplicaciones. R. Grant, 2014. Ed. Thompson.
Self-assessment questions
1. Regarding the five elements of a successful strategy which are included in Figure 1.1, appraise the
strategy of the Cirque du Soleil (es.wikipedia.org) and check whether the elements are included.
2. The evolution of business strategy shows that the characteristics of the strategic process of a firm are
very conditioned by the degree of uncertainty of its environment. “What differences can be expected
from the strategic processes of firms belonging to various cultural sub-sectors (music, design,
heritage...)?
3. As most firms of the cultural field have traditionally been in high uncertainty environments, do you
think that this can be an advantage at a time of crisis with respect to other types of firms used to
stable environments?
Section 2. Industry analysis
Table 2.1 - Industry profitability Pharmaceutical and car industries not only provide very different products, but also have very different
structures which make the former very profitable and the latter a real nightmare due to the competition of
prices and weak profit margins.
See the list of firms and industries annually published by Fortune 500: money.cnn.com
Table 2.2 - Possible industrial structures
2.1 Case for the analysis and discussion: limits of the cultural industry Many people think that culture and its artistic and creative productions are only for entertaining and enjoying,
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a perspective which considers its economic contribution as marginal, and it is therefore relegated to the area
of the public intervention. However, for others, culture is closely linked to creativity. For the latter, culture is a
strategic resource improving and influencing innovation processes, society, and the creation of economic
value, thus accepting that culture provides new sources of competitive advantages to create value through the
creation and development of firms. By developing and hybridising culture with other manifestations of
knowledge, culture is mixed with other activities and technologies of other industries, particularly the
information and communication industries. Delimiting culture scope, that is, determining the industry, is
therefore a difficult and hazardous task, as in many other industries in an economy where the processes of
interaction among value chains are generally complex.
However, with the goal of delimiting its scope, the European Union states four circles or levels of the activities
related to culture.
European Commission
As a summary, Table 1 describes these four levels of the industry: the artistic core would be in the centre;
around it, cultural industries would be in a second circle; then, another external layer includes creative
industries; and the related services industries and activities would close the industry and link it to many other
industries with wider and more diffuse borders. From this determination proposed by the European
Commission, the cultural industry would involve those industries and activities based on the creation of ideas,
as well as those which produce products combining such ideas with other inputs. This determination implies
distinguishing different categories of activities of the cultural industry. The first would be therefore made up of
the generation of cultural non-industrial products, that is, products of unique production, for example, visual
arts. The second category would include those activities generating only cultural outputs, but they come from
activities with the possibility of using the massive reproduction under property rights. In this category, the
influence of new information and communication technologies (ICTs) is evident and, as in the following
categories, the paradigm of Baumol on the influence of costs in culture dissemination is broken. The third
category includes activities not necessarily industrial whose goal may be offering unique products combined
with property rights, the creativity is here stimulated by culture, it is not an ultimate result but an intermediate
good of the production process of a functional good or service. In the fourth level or concentric circle would be
the related industries and activities which are difficult to delimit and, in some way, are mixed with cultural
activities through the offer of complementary contents.
These categories proposed by the European Commission, particularly the first three categories, have the three
main characteristics of the cultural offer which are useful to delimit the scope of culture: creativity in its
production, symbolic meaning, and capacity to be protected by mechanisms of intellectual property. THROSBY,
D. (2001).
Other studies emphasise these considerations to specify the scope of the industry, particularly the aspect that
cultural activities produce a social meaning and contents interpreting the world and affecting the social
identity and cohesion. HESMONDHALGH, D. (2002).
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Table 1 - Determining the industry: four levels of cultural and creative activities
Source: Comisión Europea (2006).
Source: La creación de empresas en el ámbito cultural. J. Ruiz Navarro (director), 2009. Fundación Autor.
Self-assessment questions of section 2
1. Do culture industries have very marked limits (video games/software)? Are they useful as contents or
resources complementing activities of other industries (tourism, the restaurant industry, etc.)?
2. Choose a high-profitability industry in the creative scope (for example, video games), and another
low-profitability industry (record companies). From what you know about the structure of the
industries selected, use the Porter’s five forces model to explain why the profitability has been high in
an industry and low in the another.
3. Which key success factors are in the industry of Flamenco shows?
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Section 3. Internal analysis: resources and capabilities
Case 3.1 ‐ ERA experimental archaeology laboratory See the full case in the website of the Cátedra de Emprendedores: www.uca.es. Last consulted: 14 January
2014.
Case 3.2 - Apple and Ángela Ahrendts See online: tecnologia.elpais.com. Last consulted: 14 January 2014. What do firms from other industries learn from cultural firms? Can cultural firms teach non-cultural firms to
manage uncertainty? Can they teach to better manage the intangible (emotions) and to develope innovations
in more traditional industries?
Case 3.3 - Football and capabilities: integrating resources to build an organisational capability Resources are combined to create organisational capabilities. However, the capabilities of an organisation are
not a simple result of the resources on which they are based.
In sports, teams with many resources are generally surpassed by teams which create strong capabilities by
using modest resources. In the European football, teams made up of many good footballers (for example,
Chelsea, Real Madrid, and Manchester United) are usually humiliated by other teams created with limited
means (for example, Borussia Dortmund, Arsenal, and Oporto).
In business, firms with modest resources also surpass the consolidated giants. In the vacuum cleaner industry,
Dyson Ltd., a small and recently created British company, became the leader in the market surpassing the giant
of electrical household appliances, Electrolux, both in United Kingdom and USA. Hyundai Motor created its first
car, a Ford Cortina, in 1968; in 2012, it was the fourth car manufacturer in the world.
Several factors determine the effectiveness of the combination of resources to create capabilities:
Processes: The role of routines as the basis of capabilities which are easier to be seen from processes, that is,
sequences of coordinated actions which are useful to carry out specific productive tasks.
Organisational structure: For an effective coordination, people intervening in an organisational capability need
to be in the same organisational unit.
Motivation: The effectiveness of people to combine efforts to achieve organisational capabilities depends on
how their personal interests are aligned with those of their team and on their motivation to use their abilities
fully.
Organisational alignment: The coherence between the environment and strategic and organisational factors.
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Source: Summed from Chapter 5 of the book Dirección estratégica: conceptos, técnicas y aplicaciones by
Robert Grant, 4th Edition (2014).
Case 3.4 - Nelson Mandela’s lessons Reading the information of the link. Searching information on Nelson Mandela’s life, watching the film Invictus
or reading the novel by John Carlin on which the film is based.
Thinking about how Nelson Mandela developed strategy. If he used similar guidelines of the cases previously
mentioned. If he faced reality (environment) with his resources, capabilities, and aspirations. Checking if he
implemented the strategy —if he was committed to a profound process of change— by overcoming the inertia
to the change described. To sum up, analysing how he undertook and added value to society.
See: www.equiposytalento.com, consulted 12 January 2014.
References
Creación de empresas en el ámbito cultural. José Ruiz Navarro (dir.). Madrid: Fundación Autor, 2008. 245
pages. ISBN 978-84-8048-789‐4.
GRANT, Robert M. Dirección estratégica: conceptos, técnicas y aplicaciones. Zulima Fernández; José Daniel
Lorenzo Gómez; José Ruiz Navarro (trads.). 5th ed. Madrid: Thomson-Civitas, 2006. 641 pages. ISBN 84-470-
2658-2.
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