Strategic Capability

Managing Strategy Session 6

Strategic Capability

Strategic Capability

This session will explore :

 Strategic Capabilities & Internal Analysis;



 

The Value Chain & the Value Network;

Resources & Competences; The Resource-Based View of Strategy & the VRIO framework;



Benchmarking

Strategic Capability

Strategic Capabilities & Internal Analysis

Purpose of an Internal Analysis

 Define and map an organisation‟s value creating process.



Identify and measure the strategic capabilities* of an organisation.

*Strategic Capabilities

“…the adequacy and suitability of the resources and competences of an organisation for it to survive and prosper.”

Johnson et al, pp. 95

Strategic Capability

The Value Chain

Value Added

   Inevitably, most organisations create value by adding value to preexisting inputs; The Value Added of a business is the difference between the market value of its outputs & the cost of its inputs. The Value Added of a not-for-profit organisation is the difference between the value of the services provided & the costs incurred.

The Value Chain





Every organisation consists of activities that link together to develop the value of the organisation. These activities together form the Value Chain.

Strategic Capability

The Value Chain

The Value Network

 When organisations supply, distribute, buy from or compete with each other, they together form a broader network of value generating activities. This process may be referred to as the Value Network.



Internal Analysis

  Map the value chain & the value network & analyse their contribution to the creation of net value within an organisation. Identify ways of deriving competitive advantage from both the value chain & network.

Value Chain Analysis

Definition

    Value Chain Analysis was first developed by Michael Porter in 1980. A Value Chain Analysis will identify the value adding activities that are performed internally...