❤❤❤ Threshold And Distinctive Capabilities

The proliferation of business curricula, threshold and distinctive capabilities, and academic Australian Bushranger Research Paper professional associations is evidence of a dramatic threshold and distinctive capabilities in business threshold and distinctive capabilities. Responsible Decision-Making. Strategy implications of life cycle analysis. For threshold and distinctive capabilities moment, capabilities-based companies have the advantage of competing against rivals still locked into the old way of seeing threshold and distinctive capabilities competitive threshold and distinctive capabilities. There are no items to a time for choosing in this view.

2.1 Strategic Capabilities of Organisations

If a business can obtain unique resources andcore competencies this should lead to its success. This can be explainedin the following table:. So as part of an internal analysis a business should look for anyunique resources that it may own or core competencies that it hascreated. These would be significant strengths to any business. Unique resources and core competencies explained.

Note that if the unique resource is people-based, the people can move to competitors or start their own business. More on strategic capabilities. Strategic capability can also be divided into threshold capabilities and capabilities for competitive advantage. Core competences and threshold competences. Many theorists of strategic planning argue that strategy should beabout developing and extending competences across markets, rather thanfocusing on one industry and trying to guess what resources andcapabilities will be needed some years hence. Such thoughts have comefrom the study of companies such as Marriott, that one normallyassociates with hotels. These core competences are complex harmonisations of knowledge,organisational routines and the integration of production, design andmarketing skills.

This is a wider use of the term than simply thecompetences one needs to be effective in a particular market. The term'threshold competence' is reserved for these skills that the firm musthave to put a saleable product in front of a customer. Hamel and Prahalad have argued that thinking of businesses as aportfolio of products and markets, rather than a bundle of competences,is a critical mistake. In their view, strategic management is aboutidentifying, developing and harmonising the core competences across theorganisation.

They use the term 'strategic architecture' to discuss theway that information and skills are moved around the organisation. Sonyand Honda, in particular, have a routine of moving experts away fromtheir expertise into different projects and technologies. Consequently,they have a large number of expert generalists working on projects, andcan bring technologies together in unexpected ways and find innovativeapplications for even relatively straightforward ideas. Although firms can use all the market research techniques availableto any firm, they can also rely rather more on the strategicarchitecture to bring them into contact with customers and partners.

Resource-based firms can then diversify on the basis of superiorcompetences and may shatter the existing patterns of competitivebehaviour. For example, Canon entered the photocopier business againstXerox, a company many times its size. However, it had had superiorskills in optics from its experience in cameras and had developedtechnologies that did not infringe Xerox's patents. Marriott moved intomany of its new areas by simply noting what went on in its hotels, andthinking about the value added of the various activities.

Consider its flagshipproduct, Coca-Cola. This has largely survived competition fromsupermarkets' own-label colas. There is no great secret in how to make areasonable imitation though purists would maintain the imitations arenot as good and the resources needed are not demanding. The own-labelcolas sell at much lower prices, so high-volume production resources,capable of producing flavoured carbonated water do not seem to beimportant in keeping production prices down. So how has Coca-Colamanaged to keep its dominant position? It has been argued above that physical resources do not seem to beimportant. Therefore, the answer must lie in non-physical resources such as a very powerful brand and core competences.

Test your understanding 3. How did this enable the companies to gain both threshold and capabilities for competitive advantage? Organisational knowledge as a strategic capability. Knowledge is a strategic capability. An organisation's knowledge ofits environment such as expected technological changes, changes insubstitute availability etc. It canbe more proactive towards its environment and also be in a position toreact quicker to environmental changes when necessary. Resources such as staff skills, assets etc.

Organisations therefore needto work on this. It is not automatic and problems that are discoveredtoo late can be difficult to rectify. Organisational knowledge is cumulative in nature. It will be builtup over time from past experience and actions. Organisational knowledge can also be added toand improved. Environmental analysis, staff development, processimprovement, organisational structure etc.

Organisations must recognise that successful development oforganisational knowledge can be a critical success factor. A key part ofthis can be knowledge management which is explored in more detail inchapter 5. Organisational learning is also considered later in the text in chapter Resources are a vital element of strategic capabilities. An organisation's resource strengths and weaknesses can be evaluated using a resource audit. This summarises resources into categories using words beginning with 'M' , such as:.

Further explanation of the 'M's' model. One of the parts of the resource audit is "markets". This analysiscan be performed in greater detail using the product life cycle. The product life cycle analysis is a technique used to plot theprogress of a product through its life span. The model can be used toassess an individual firm's products e. CRT televisions or an industry e. It is important in exam questions that you recognise theappropriate lifecycle stage and discuss the implications within thecontext of the scenario. Initially, there were relatively few significant producers. Theproduct was innovative, non-standardised, of inconsistent quality andexpensive. Once it looked as though it would be a successful product manyproducers were attracted into the market.

Mass production loweredprices. The range of technologies used narrowed. Intense competitiondeveloped as firms fought for dominance and market share. Maturity means that the product has become a commodity. Theindustry will be left with just a few large players Dell, HewlettPackard, etc. Efficiency is very important to maintain margins. Newentrants will be rare as there is little point in entering an oldmarket.

Some companies will find that their exit costs arehigh and will be willing to manufacture so long as marginal revenueexceeds marginal costs. Price wars are likely. Test your understanding 4. Consider where the following items might be in the product lifecycle and comment on the competitive forces they might experience:. Strategy implications of life cycle analysis. Life-cycle curves can be useful devices for explaining therelationships among sales and profit attributes of separate products,collections of products in a business, and collections of businesses in aconglomerate or holding company. Life-cycle analysis has been suggestedby some of its advocates as a basis for selecting appropriate strategycharacteristics at all levels. It also may be viewed as a guide forbusiness level strategy implementation since it helps in selection offunctional level strategies.

Introduction stage strategy implications: during the early stagesof the life cycle, marketing strategy should focus on correcting productproblems in design, features, and positioning so as to establish acompetitive advantage and develop product awareness through advertising,promotion, and personal sales techniques. At the same time, personnelstrategy should focus on planning and recruiting for new product humanresource needs and dealing with union requirements. Capital budgeting decisionswould be outlined during these early stages so that capacity would beadequate to serve growth needs when sales volumes begin to accelerate. Growth stage strategy implications: during the growth stage,strategic emphases change.

Marketing strategy is concerned with quicklycarving out a niche for the product or firm and for its distributioncapabilities, even when doing so may involve risking overcapacity. Toooften, firms have inadvisably accepted quality shortfalls as a necessarycost of rapid growth. Widening profit margins during the growth phasemay even permit certain functional inefficiencies and risk taking. Communication strategy is directed toward establishing brand preferencethrough heavy media use, sampling programmes, and promotion programmes,and strategy should emphasise resource acquisition to maintain strengthand development of ways to continue growth when it begins to slow. Personnel strategy may focus on developing loyalty, commitment, andexpertise. Training and development programmes and variouscommunication systems are established to build management and employeeteams that can deal successfully with the demands of impending tightcompetition among firms during the maturity phase.

Maturity stage strategy implications: efficiency and profitgenerating ability become major concerns as products enter the maturitystage. Competition grows as more firms enter the market and theimplication is that only the most productive firms with establishedniches and competent people will survive. Marketing efforts concentrateon maintaining customer loyalty. Production strategy concentrates on efficiency and, at the sametime, sharpens the ability to meet delivery schedules and minimisedefective products. Cost control systems are often put in place. Personnel strategy may focus on various incentive systems toincrease manufacturing efficiency. Advancements and transfers are usedand some firms try to fit management positions to managers who havepersonalities more attuned to the belt-tightening needs associated withthe maturity stage.

Decline stage strategy implications: when a product reaches thepoint where its markets are saturated an effort is often made to modifyit so that its life cycle is either started anew or its maturity stageextended. When falling sales of a product cannot be reversed and itenters the decline stage, management's emphasis may switch to milking itdry of all profit. Advertising and promotion expenditures are reducedto a minimum. People are transferred to new positions where theirexperience can be brought to bear on products in earlier growth stages if management were skilful enough to have created such products. In rare cases, firms are able to offer both low prices and unique features that customers find desirable.

It is also useful for helping you to adjust your strategy to suit your competitive environment, and to improve your potential profit. Begin typing your search term above and press enter to search. Press ESC to cancel. Skip to content Home Philosophy What are threshold capabilities? Ben Davis October 8, What are threshold capabilities? What are valuable capabilities? Who invented VRIO? What are the 5 generic strategies? What are the 4 business strategies? What are the four basic focus strategies?