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Please locate a recent news article (no more than six months old please) that is relevant to the subjects/concepts introduced in Ch03(attached file) and prepare a short analysis/summary of the news article.Blog should consist of a link to the article you have found and your analysis as to why and how it is related to the topic introduced in that module (one paragraph with 150-200 words). Please do not use sources such as news paper columns, commentaries, blogs, case studies, white papers, research reports and the like as your chosen news articles. According to Merriam-Webster, news is a report of recent events.

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Chapter 3 The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages 故曰:知彼知己,百戰不殆;不知彼而知己,一勝一 負;不知彼,不知己,每戰必殆。 So it is said that if you know your enemies and know yourself, you can win a thousand battles without a single loss. If you only know yourself, but not your opponent, you may win or may lose. If you know neither yourself nor your enemy, you will always endanger yourself. - Sun Tzu © RoyaltyFree/ Stockdisc/ Getty Images Southwest Airlines • What is Southwest’s business model? • What is the airlines industry like? • How does Southwest’s business model help the airlines achieve strategic competitiveness in this industry? • What strengths and weaknesses does Southwest airlines have? Analyzing the External Environment Opportunities and threats By studying the external environment, firms identify what they might choose to do. Analyzing the Internal Organization Unique resources, capabilities, and competencies (required for sustainable competitive advantage) By studying the internal environment, firms identify what they can do. Resources, Capabilities, and Core Competencies • Resources: Competitive Advantage Core Competencies Capabilities Resources • Tangible • Intangible – are the source of a firm’s capabilities. – are broad in scope. – cover a spectrum of individual, social and organizational phenomena. – alone, do not yield a competitive advantage. Resources • Resources – A firm’s assets, including people and the value of its brand name, that represent inputs into a firm’s production process: • • • • • capital equipment skills of employees brand names financial resources talented managers • Types of Resources – Tangible resources: • • • • financial physical technological organizational – Intangible resources: • human • innovation • reputation Resources, Capabilities and Core Competencies Capabilities: Competitive Advantage Core Competencies Capabilities Resources • Tangible • Intangible • represent the capacity to deploy resources that have been purposely integrated to achieve a desired end state. • emerge over time through complex interactions among tangible and intangible resources. Resources, Capabilities and Core Competencies Core Competencies Competitive Advantage Core Competencies Capabilities Resources • Tangible • Intangible • Resources and capabilities that are the sources of a firm’s competitive advantage that: – distinguish a firm competitively and reflect its personality. – emerge over time through an organizational process of accumulating and learning how to deploy different resources and capabilities. Resources, Capabilities and Core Competencies Competitive Advantage Core Competencies Capabilities Resources • Tangible • Intangible Core Competencies (cont’d): • activities that a firm performs especially well compared to competitors. • activities through which the firm adds unique value to its goods or services over a long period of time. Building Core Competencies Sustainable Competitive Advantage Four Criteria of Sustainable Advantages • • • • Valuable Rare Costly to imitate Nonsubstitutable The four criteria of sustainable competitive advantages: • valuable capabilities • rare capabilities • costly to imitate • non-substitutable Superhero Analysis • Wolverine • Spider-Man • Iron Man • Silver Surfer Service Marketing and Sales Procurement Technological Development Human Resource Management Firm Infrastructure The Basic Value Chain Outbound Logistics Operations Inbound Logistics Building Core Competencies: Criteria and Value Chain Analysis • Value Chain Analysis – Primary activities • Involved with product’s physical creation, sales and distribution to buyers, and service after the sale – Service, marketing/sales, outbound/inbound logistics and operations – Support activities • Provide assistance necessary for the primary activities to take place • Includes firm infrastructure, HRM, technologies development and procurement Outsourcing • Definition: Purchase of a value-creating activity from an external supplier – Effective execution includes an increase in flexibility, risk mitigation and capital investment reduction – Trend continues at a rapid pace – Firms must outsource activities where they cannot create value or are at a substantial disadvantage compared to competitors • Can cause concerns – Usually revolves around innovative ability and loss of jobs Outsourcing Decisions Service Marketing and Sales Procurement Technological Development Human Resource Mgmt. Firm Infrastructure Support Activities A firm may outsource all or only part of one or more primary and/or support activities. Outbound Logistics Operations Inbound Logistics Primary Activities Competencies, Strengths, Weaknesses and Strategic Decisions • Firms must identify their strengths and weaknesses • Appropriate resources and capabilities needed to develop desired strategy and create value for customers/other stakeholders • Tools (I.e., outsourcing) can help a firm focus on core competencies as the source for CA • Core competencies have potential to become core rigidities – Competencies emphasized when no longer competitively relevant can become a weakness • External environmental conditions and events impact a firm’s core competencies
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“Understanding what kind of environment that your business operates in”
Understanding the kind of environment that a company operates in enables the company
to know what is expected of it in the market. Failure to understand both the internal and external
environment will automatically result in some problems which might be difficult to deal with.

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