MM 5012 BUSINESS STRATEGY AND ENTERPRISE MODELLING

SUMMARY ASSIGNMENT II

R48A

Henny Zahrany 29112551

MASTER OF BUSINESS ADMINISTRATION SCHOOL OF BUSINESS AND MANAGEMENT INSTITUT TEKNOLOGI BANDUNG 2014

THE INTERNAL ENVIRONMENT: RESOURCES, CAPABILITIES, COMPETENCIES, AND COMPETITIVE ADVANTAGE A. The Context Of Internal Analysis Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to a competitive advantage for the firm. B. Creating Value Value is measured by a products performance characteristics and by its attributes for which customers are willing to pay. Firms create value by innovatively bundling and leveraging their resources to form capabilities and core competencies. C. The Challenge Of Analyzing The Internal Organization There are three conditions affecting managerial decisions about resources, capabilities, and core competencies: 1) Uncertainty (about the firms general and industry environments and customers needs) 2) Complexity (from the interrelationships among conditions shaping a firm) 3) Intraorganizational Conflicts (exist among managers making decisions as well as among those affected by the decisions) D. Resources, Capabilities, and Core Competencies Resources: There are two kinds of resources, tangible and intangible. Tangible resource consists of: financial resources, organizational resources, physical resources, and technological resources. While intangible resources consist of human resources, innovation resource, and reputational resources. Capabilities Capabilities are used to complete the organizational tasks required to produce, distribute, and service the goods or services the firm provides to customers for the purpose of creating value for them. They are often based on developing, carrying, and exchanging information and knowledge through the firms human capital. Core Competencies

Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals. It distinguishes a company competitively and reflects its personality. The example is: the firms marketing and advertising skills contribute to its consumer understanding and brand-building core competencies. E. Building Core Competencies 1) The Four Criteria Of Sustainable Competitive Advantage a) Valuable Capabilities (exploit opportunities or neutralize threats) b) Rare Capabilities (are not possessed by many others) c) Costly to imitate Capabilities (historical, ambiguous cause, and social complexity) d) Nonsubstitutable Capabilities (no strategically equivalent valuable resources) 2) Value Chain Analysis A firms value chain is segmented into value chain activities and support functions. Value chain activities are activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers. Support functions: activities the firm completes in order to support the value chain activities. The Value chain analysis and support functions figure will be present in the exhibit. A RESOURCE-BASED VIEW OF COMPETITIVE ADVANTAGE AT THE PORT OF SINGAPORE A. OPERATIONS AT THE PORT Key Operations: Key customer requirements in Port operations include freight rates, frequency of services, shipping options, turnaround time, Port charges, support services, and feeder operations. Port personnel use Computer Integrated Terminal Operations System (CITOS) to create plans for ship berthing and for unloading containers. B. ENABLING THE PORT OPERATIONS PSA has number of support features or enablers that make the Port operations highly effective and help sustain its competitive edge: Has large merchant fleet

 Largest owner of warehouse space in Singapore PSAs workforce is trained to focus on customers Maintain productivity through investing in employee training Actively integrated its own operations as well as customer operations through the internet, Portnet.com. C. INNOVATIONS IN INFORMATION & OPERATIONS TECHNOLOGY Such information and operations technology are including Tradenet, CITOS, CIMOS, etc. All of these could reduce time, increase quality, cut costs, and create a high degree of flexibility that gives a sustainable advantage. D. THE RESOURCE BASED VIEW The RBV theory defines firm resources as all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm. ..What were resources in a previous industry setting maybe weaknesses, or simply irrelevant in a new industry setting (Barney, 1991, p. 103). Teece et al have suggested a view of advantage based on dynamic capabilities which are the firms ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. E. THE ANALYSIS There are two natural and three additional manmade resources which have contributed to the success of the Port and PSA corporation: Singapores location, the natural harbor, capital for infrastructure-foreign investment, IT and operations capabilities for a Port, and IT management skills. The combination of Singapores infrastructure, IT, operations and specialized Port equipment also contributes to the Ports competitive position. IT management skills and Port operations and information technology combine to make it difficult for other Ports to replicate its facilities. Government development policies also attracted foreign investment and contributed to the successful design and implementation by its educational and industrial policies.

What are the main ideas of the reading materials? Whether to enter or survive in an industry, a company must match its core competencies that resulted from its resources with opportunities . When a company combine their external and internal environment analysis, they could reach strategic competitiveness and above-average returns. What are the requirements for implementing the ideas in your own context? To do an internal environment analysis, a company should start with determining its resources, form their resources, they create capabilities that are often developed in specific functional areas. From capabilities a company could build core competencies through an organizational process of accumulating and learning how to deploy different resources and capabilities. Next we decide which core competencies we should build and develop, the first tool by using four criteria of sustainable competitive advantage and second by using value chain analysis. What are practical implications for you? It is also important to look inside rather than to look outside on which spot that could a company fill in and determine all the possible and best way to use. We should carefully decide what resource and capabilities that could differentiate us from the others. To determine that we could use the two tool available, the four criteria of sustainable competitive advantage or by using value chain analysis. This process should take regularly, we couldnt just stop at one time, because everything is changing, so we should always aware of the external environment too. What are the lessons learned? It is important to supplementing strong natural resources that a company has with manmade resources that could make its resources rare, valuable, inimitable, and nonsubstitutable. Overtime a competitor may be able to duplicate an organizations strategic resources, so thats why a company must consider dynamic capabilities to manage well in a changing environment. Operation and Information technology major contribution is to create flexibility that could enlarge/expand capacity without adding investment in plant and equipment or physical space. Technology helps the firm utilize assets more effectively.