Hitt7eCh01.ppt

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ? 2007 Thomson/South-Western. All rights reserved. 1–* Resources and Capabilities Resources Inputs into a firm’s production process: Capital equipment Skills of individual employees Patents Finances Talented managers Capabilities Capacity of a set of resources to perform in an integrative manner A capability should not be: So simple that it is highly imitable. So complex that it defies internal steering and control. ? 2007 Thomson/South-Western. All rights reserved. 1–* Resource-Based Model cont’d 1. Identify the firm’s resources—strengths and weaknesses compared with competitors Resources Resources: inputs into a firm’s production process ? 2007 Thomson/South-Western. All rights reserved. 1–* Resource-Based Model cont’d 2. Determine the firm’s capabilities—what it can do better than its competitors. Resources Capability Capability: capacity of an integrated set of resources to integratively perform a task or activity. ? 2007 Thomson/South-Western. All rights reserved. 1–* Resource-Based Model cont’d 3. Determine the potential of the firm’s resources and capabilities in terms of a competitive advantage. Resources Capability Competitive Advantage Competitive advantage: ability of a firm to outperform its rivals. ? 2007 Thomson/South-Western. All rights reserved. 1–* Resource-Based Model cont’d 4. Locate an attractive industry. Resources Capability Competitive Advantage Attractive Industry Attractive industry: an industry with opportunities that can be exploited by the firm’s resources and capabilities. ? 2007 Thomson/South-Western. All rights reserved. 1–* Resource-Based Model cont’d 5. Select a strategy that best allows the firm to utilize its resources and capabilities relative to opportunities in the external environment. Resources Capability Competitive Advantage Attractive Industry Strategy Formulation and Implementation Strategy formulation and implem