Chapter Four Powerpoint Presentation

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  • 1. Chapter 4 Learning Objectives
      • After studying this chapter, you should be able to:
      • explain what firm resources and capabilities are
      • undertake a basic SWOT analysis of the value chain to decide whether to keep an activity in-house or outsource
      • analyze the value, rarity, imitability, and organizational aspects of resources and capabilities
      • participate in two leading debates on crossborder capabilities and offshoring
      • draw implications for action
  • 2. SWOT Analysis
    • SW = Strengths and Weaknesses
    • Internal assessment of the organization leading to management decisions
    • OT = Opportunities and Threats
    • External assessment of the business environment to identify the uncontrollable events that might impact management decisions
  • 3.
  • 4.
  • 5. Outsourcing
    • outsourcing
    • Turning over an organizational activity to an outside supplier that will perform it on behalf of the focal firm.
    • offshoring
    • Outsourcing to an international or foreign firm.
    • inshoring
    • Outsourcing to a domestic firm.
    • captive sourcing
    • Setting up subsidiaries abroadthe work done is in-house but the location is foreign
  • 6. VRIO framework
    • The resource-based view that focuses on certain aspects of resources and capabilities:
    • (V) value - Only value-adding resources can possibly
    • lead to competitive advantage
    • (R) rarity - Only valuable and rare resources and capabilities have the potential to provide some temporary competitive advantage
    • (I) imitability - source of competitive advantage
    • only if competitors have a difficult time imitating them
    • (O) Organizational - How can a firm (such as a movie studio) be organized to develop and leverage the full potential of its resources and capabilities?
  • 7. Offshoring versus Not Offshoring
    • Because digitization and commoditization of service work is only enabled by the recent rise of the Internet and the reduction of international communication costs, whether such offshoring proves to be a long-term benefit or hindrance to Western firms and economies is debatable.
    • Proponents argue that offshoring creates enormous value for firms and economies.
    • Critics of offshoring argue against it on strategic, economic, and political grounds.
  • 8.