An internal capacity for leveraging resources and competences is a prerequisite for creating competitive advantage

Docs en anglais | 7 pages | 03-07-2008 | Format : | Note : Non noté

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Résumé

Strategic Management refers to three elements: the strategic position who leads to make strategic choices which will permit to turn strategy into action. Though, these elements are strongly linked together in this essay we will focus on the first step. An organisation is a set of interdependent elements, which in turn are dependent which the external environment. Resources of a firm mean tangible assets such as production facilities, raw materials, financial resources, real estate; intangible assets which are for instance brand names, company reputation, technical knowledge, patents; and organisational capabilities such as skills or way of combining assets.

For instance Dell computer built its growth by creating an organisation capable of the speedy with inexpensive manufacture and delivery of custom-built PCs. Dell subsequently revolutionized its own “system” using the Internet to automate and customize service, creating a whole new level of organisation capability. A competence means the way to obtain the best from the resources, to turn inputs into outputs. Thanks to this capability firm can create competitive advantage. A competitive advantage allows the firm to be more performant than its competitors thanks to the unique feature of its core competences. A company can gain competitive advantage by adopting management approaches that satisfy customers thanks to cost competitiveness, high quality products, speed and innovation.

While an internal capacity is obviously a prerequisite to create competitive advantage, it is not enough to gain a sustainable, unique and durable competitive advantage. Indeed as we will see in this essay, each company must consider a great number of factors like the macro-environment, competitors and customers to really have a complete view of the situation and adapt its strategy (Johnson, Scholes and Whittington, 2005, p. 8).

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