Research Report Updated - Afte Pallaragism

University of Petra
Faculty of Administrative & Financial Sciences

Department of Business Administration
A Research Study:-
The Role of Dynamic Capability

for Successful Business Expansion:
The Case of Food Industry
By
Homam A. Al-Rifai
Hadeel Al-Turk
MBA candidates – Operations Management Course
Amman, 2017
The Role of Dynamic Capability for Successful Business Expansion: The Case of Food Industry
_______________________________________________________________________________________________
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION…………………………………………………...……………………….3
1.1. Research Questions …….……….………………………...………………………………………………3
1.2. Research Objectives ……………………………………………………………………………………....3
1.3. Literature Review …………………………………………………………………………………….…...4
CHAPTER 2: MANAGING FOOD SUPPLY CHAINS ………...…………………………………...…….6

2.1. The actors in a food supply chain …………………..……...………………………………………………6
2.2. Types of Food Supply Chains ……………………………...……………………………………………...8
2.3. Factors influencing Food Supply Chains ……………………...…………………………………………..9
CHAPTER 3: EXPANSION IN FOOD BUSINESSES ………………………………………...………......9

3.1. Strategic Development of the Food Businesses ………...………………………………………………....9
3.2. Expansion Strategies in Food Industry……….…………………………………………………………..10
3.3. From “Five Forces” to “Dynamic Capabilities”…...……………………………………………………..12
CHAPTER 4: DEVELOPMENT OF DYNAMIC CAPABILITIES ……………………......…………....14

4.1. Organizational Capabilities vs. Dynamic Capabilities ….………………………………………………..14
4.2. Designing for Dynamic Capabilities ……………………………………………………………………..15
4.3. Dynamic Capabilities: Driving Strategy into Action …...………………………………………………..19
REFERENCES………………….…………………………………………………………………………..21
_______________________________________________________________________________________
Page 2 of 21 By Homam Al Rifai / Hadeel Al-Turk
MBA candidates- Operations Management Course
_______________________________________________________________________________________________
CHAPTER 1
INTRODUCTION
1.1. Research Questions
The following research questions were addressed in this study:

o How the management in food industry differs from other industries?
o How company’s resources and capabilities play a crucial role in gaining a competitive management in
the food market where the competition considered to be high?
o What is the role that strategic management play in successfully expanding such a business?
o How we can build a culture in a business where we can get our capabilities to be dynamic to cope with
external environments?
o What are stakeholder perspectives on the strategic development of industry organisations?
o Can the concept of dynamic capabilities help to guide the development of a long-run industry
organisation?
1.2. Research Objectives
Our objectives in this research to:

o Observe how the resources and core competencies are the main players in the game of getting a
higher shares in the market competition.
o Investigate the importance of strategic management in expanding a business in the food industry.
o Obtain how an organization can cope with external environment based on its resources and
capabilities especially the dynamic ones.
o Investigate the importance of getting the business departments integrated between each other to get
the dynamicity of resources and business expansion at the end.
_______________________________________________________________________________________
_______________________________________________________________________________________________
1.3. Literature Review

Current thinking and international commitments to trade development emphasise supporting key players in
the industry value chain, especially strengthening associations or industry organisations. An industry is a group
of institutions which produce similar products or offer similar services. Organizations or industrial associations
are the membership organizations established to follow up the interests of members and industry.
The high and down of industry organizations printed by microfinance organizations and farmer-based
organizations in emerging economies prpose the need for a strategic approach to organizational development.
In this state, the strategic imperatives of building a competitive industry define the priorities of the value chain
actors as the foundation for the long-term enlightened option for funding and organizational development
(Ahenkura, 2012).
The five-power approach to strategic management is the essence of formulating a competitive strategy as a
company relates to its environment and how these forces determine the profitability of different industries and
industries (Porter, 1980). The main aspects of the company's environment are the industry or industries in
which it competes. The industry structure has a strong impact on competition and is corporate strategy.
Increasingly, industry organizations or associations are expected to play a role in shaping industry and the
future of the sector. However, there is information on what can be the strategic intent of industrial
organizations. In today's heterocompetitive business environment this information is vital if industries are
dynamic and competitive.
Dynamic capacity is defined as the ability of the company to integrate, build and re-create internal and external
competencies to handle rapidly changing environments (Tess, Pisanu & Schoen, 1997). Dynamic capabilities
reflect the ability of the firm to achieve new forms of competitive advantage due to market implications and
market positions (Lornard Barton, 1992). (Luo, 2000; Shinkar and Luo, 2008) There is also the concept of
dynamic capacity of enterprises within industries (Tess, Pisanu & Schoen, 1997; Littinen, Rose & Yu, 2002;
Need to be explored in industrial organizations (associations).
The concept of dynamic capabilities as the ultimate source of competitive advantage is at the beginning of
strategic research and is at the forefront of important in the present days (Hu & Xi'an, 2010). The area of
strategic management is a normative standard because it seeks to guide aspects of public administration that
have fundamental implications for success and survival (Tess, Pisanu & Schoen, 1997). The approach of
ability tends to direct managers towards creating important, competitive, distinctive and difficult advantages
to imitate and avoid games with customers and competitors. Tess et al. (1997) introduced the term "dynamic
capabilities" to emphasize the company's ability to exploit the company's internal and external competencies
_______________________________________________________________________________________
_______________________________________________________________________________________________
to address the changing environment. Strategic management research provided information on the
environment and its relationship with a company. Using structural approach, based on the structure of
performance behaviour (S-C-P) model and industrial organization (E) economy. Porter (1980) identified a
framework that could be used to understand industry structure and its usefulness in evaluating the facilitation
of competitive analysis of industry competitors
In the literature, it is suggested that firms in stable competitive environments can maintain their competitive
position by engaging in long-term exploits that are sometimes affected only by the relatively short and
turbulent continuity of markets and technologies (March 1991). Through the process of exploitation,
companies revise competencies through repeated actions over long periods of time (Eisenhart and Martin,
2000), while exploring through exploration and creation of new competencies (Christensen, 1997; Winter &
Solansky, 2001). (DIVINI, 1994), rapid change is endemic and less predictable, players in competitive
environments, increase, competitive competitive environments, determined by "intensive and rapid
competitive moves, in which competitors must move quickly to build advantages and undermine the
advantages of their competitors." Agility: That exploration is superior to the persistence and persistence of
new sources of competitive advantage.
_______________________________________________________________________________________
_______________________________________________________________________________________________
CHAPTER 2
MANAGING FOOD SUPPLY

CHAINS
Food supply chains are important for humans on the ground. It is very important that the food has a set of
features and is the right time, quality and quantity. The food supply chain consists of a group of companies
operating in different markets and selling a variety of food products.
The food supply chain affected by the regulatory scope at all levels. The degree of market power that
companies maintain the chain depending on the product category, depending on the relevant markets in which
they operate. It has an impact on contractual relations between key players along the chain and can affect the
extent to which agricultural commodity prices move to the consumer prices.
2.1. The actors in a food supply chain
The food supply chain is a series of entities, processes and operations that help transport food from its raw
state to the consumer. It is a complex network of interconnected entities that provide food to the consumer.
There are three main sectors of the food industry: the agricultural sector, the food processing industry, and the
distribution sectors. Basic agricultural commodities are often subject to a large series of intermediate
adjustments before being sold as final food products. Imaging of the food supply chain can lead to better
understanding of how prices are formed and how input costs are transferred, where interactions occur between
firms and where different systems can have a direct impact. However, given the existence of specific food
supply chains for each purchased food product, the following imaging is a necessary facilitation.
The agricultural sector is the first sector in the food supply chain. Its activities include livestock breeding and
crop production. Since agricultural commodities consist of very different products, the distribution channels
in the sector are equally diverse. Companies in the agricultural sector primarily sell their raw materials to the
food processing sector, but also sell directly to retailers, end consumers or alternative markets.
_______________________________________________________________________________________
_______________________________________________________________________________________________
The food processing industry is consists of a number of diverse activities. They include, for example, cutting,
refining, milling, cleaning, drying and slaughtering. Different inputs are processed in successive stages and in
varying degrees, packaged and sent to customers. Another important task of food manufacturers is to conduct
market research and products that lead to the development of new products or markets, and engage in
marketing functions. The distribution sector is the main outlet for food products, and as the last supply chain,
it interacts directly with end consumers. Retailers can also provide services to food manufacturers, such as
promotional activities.
Intermediate goods can be transported directly between companies involved in production or sale to consumers
or, as is often the case, by certain wholesalers. These transfers can be analysed from a contractual and technical
perspective. The contractual aspects refer mainly to the interaction between the seller and the buyer and are
influenced by the relative market power of the companies along the chain. In terms of technical aspects, the
transport of goods involves a series of tasks that generate costs, such as costs incurred for transport, storage
and logistics.
_______________________________________________________________________________________
_______________________________________________________________________________________________
2.2. Types of Food Supply Chains
Food supply chains can be discussed as those serving markets and as those serving the final consumer. The
First type works through the trading of agriculture produce in bulk or as a commodity. The second type works
towards the fulfilment of the Consumers’ needs.
 Commodity- and producer-focused chains

The output from farms moves downstream in two formats, either directly as fresh produce to the consumer
(fresh fruit, vegetables and so on) or in bulk as a raw material within food processing Plants.
 Consumer-driven value chains

Food traceability and identity are very important within consumer driven chains, as this is the last stage of the
food supply chain and has a direct effect on the well-being of the consumer.
2.3. Factors influencing Food Supply Chains
Since the world is cons changing very quickly. Technological innovations, new business models, globalization
and social responsibility all these and others issues have made an effect on the food supply chains in reconsider
the fulfilment and effectiveness of parameters. Innovation in transportation has made products more suitable
for global distribution, innovations in Management and information and communication technologies (ICT)
have allowed supply chains to become more responsive to increasingly sophisticated food requirements from
consumers. The following are some of the other factors affecting and affecting the food supply chain. Consider
Value Chains, Legislation, Sustainability, Collaboration, and Consumer Choice.
_______________________________________________________________________________________
_______________________________________________________________________________________________
CHAPTER 3
EXPANSION IN FOOD
BUSINESSES
3.1. Strategic Development of the Food Businesses
Marketing strategies are being developed on the basis of the effects of the challenges and opportunities
identified in analysing the market environment of the food industry. It is known that the collection and analysis
of this micro information and macro environmental marketing, predominating as well as the internal
environment, is a situation analysis.
The internal environment is interested with the challenges which come from within the organization as well
as the following activities of the organization:
• Existing marketing objectives, strategy, and performance
• Allotment and availability of resources
• Cultural and Structural traits.
Before the formulation of marketing strategies, it is fundamental for you to make a situation analysis. There
are many matters that have to consider in analyzing the situation. While viewed altogether they will provide
you a "great picture" of the challenges and opportunities that faced by an organization or industry. For
organizations, these pains participate to the lead of competitive advantages (Ferrell & Hartline, 2014).
Food industry is permanently under stress due to rising competition from domestic and international
competitors, in order to survive the persistent stress the organizations. There are strategies you can follow:
1. Transfer products with more nutritive value and less allergens: As more customers are consensured
in eating healthy the added factor will assist you to gain competitive advantage. Many companies have
already done so by producing whole grain products to attract customers.
_______________________________________________________________________________________
_______________________________________________________________________________________________
2. Reduce costs continually: The only way that food and beverage companies can survive is by reducing
costs and increasing efficiency. This can be done by using the various techniques currently available.
Many companies take advantage of these technologies and make the production system fully automated
to assist reduce labor costs and thus greatly gain competitive advantage against competitors.
3. Reducing environmental impact: Major companies are currently focusing on this because they have
figured out that by limiting the impact on the environment not only does it gain a competitive advantage
in the eyes of customers they can also minify costs by minifying waste.
3.2. Expansion Strategies in Food Industry
Food companies can sought to rise growth through acquisitions, new products, and expansion. For growth
there is a must new product development. In 1980s, food companies were founding new products at a rate of
over 10,000 per year, and the rate has increased in the 1990s. As a result, new industry segments persist to
emerge: particular foods for babies and the elderly, quick snacks; healthy foods for the fitness oriented, ready-
made foods for heating in the microwaves; low-calorie foods for dieter.
There are other strategic adjustments made by companies. They make productive work longer, develop closer
relations with retailers, and introduce their own brands. Other pains include cost control, more innovative
products, lower prices and new distribution methods, including remote shopping and traditional retail outlets
through the sale of finished products in restaurants and sports venues. Both vertical integration may be brought
forward by manufacturers and integration again by retailers. Food operations can be relatively integrated from
crop cultivation through manufacturing and distribution. Substantial expertise is required in each value-added
sector. Clarifying the direction of vertical integration is the "effective consumer response" efforts by some
companies. The time has been reduced from the manufacturer to the retail store in recent years from 103 days
to 62 days, by connecting suppliers and retailers using computers.
3.2.1. Increase your sales and products in existing markets.
This is the easiest and most dangerous way to expand. This may require larger sites, different pricing strategies,
and new marketing techniques. If you get off the track, existing customers let you know!
_______________________________________________________________________________________
_______________________________________________________________________________________________
3.2.2. Introduce a New Product.
There is a successful product / service you have been providing and data collection, customer feedback and
tampering with your latest product. This is a natural development in business, not just an expansion tactic.
When positioned as a hostess value and responsive to customer needs, this is relatively a risk-free way of
expansion.
3.2.3. Develop a New Market Segment or Move into New Geography.
These two areas (evolving a New Market Segment or Moving into New Geography), demand cost outlays and
waif. Transferring your products into new categories or demographic segments demands market research, beta
testing and new marketing strategies. Management of new remote locations take in worthy time and attention.
For most businesses search to expand, these two methods of expansion are unavoidable in other hand the risks
are extra, the reward are big.
3.2.4. Start a Chain.
Restaurant, retail or business service that is easily copied and can be operated from a distance to everything
you need to launch a chain. But, you should be aware of what made the site a success first - was it the site,
your staff or you? If you are just for you, then duplication is possible only through detailed operations plans
and employee-to-site sharing. You will need to replicate your first site plan whilst meeting growing customer
demands. Starter a chains gives current employees a crack in "managing" duties, training opportunities and a
chance to broaden their horizons.
3.2.5. Franchise or License.
In spite of it's a fast track to growth, a franchise consent enable cost (minimum) $90,000 to make it ready. You
need to be a perfect teacher, Capable to prepare the training manuals (most likely more than sole language),
be so organized and interested to travel. Licensing can load minus risk, but demands a specific amount of
monitoring. Licensing the patent, brand or industrial layout that’s means that manufacturing, or allocation
were sold in right way.
_______________________________________________________________________________________
_______________________________________________________________________________________________
3.2.6. Join Forces / Strategic Alliance.
An acquisition or consolidation that compiles the better of two companies, extends your customer basis, raises
intellectual capital and delivers operational efficacies. The ploy is finding the right partner. These partners
might new distributors, but be warned big retailers weighty performance anticipations. Can you perform to the
letter of your pledge? Can you meet high standards of quality (like ISO or something like that) and adapt the
procedures to meet just-in-time delivery? Intense contractual arrangements and Due care are fundamental here.
3.2.7. Go Global.
You can go global in several ways. Growing markets, improving business climate and rising customer outlays.
At times the only place for finding these things is outside. Doing business internationally can take the form of
exporting, licensing, a joint venture or manufacturing, but whatever sort you choose, the basic business
principles stratify: estimate customer demand, protect intellectual property, earning assist in legal and
accounting.
3.3. From “Five Forces” to “Dynamic Capabilities”
The consideration of explaining a firm’s capability to superior its competitors, amongst other things, from a
strategic management perspective, theoretical approaches, Involve Porter’s industrial paradigm and the
resource-based theory. The first approach, depending on the structure-conduct-performance (SCP) paradigm,
and it is focuses on the firm’s ability to exploit its market power and the industrial structure, to obtain superior
performance. As contrary to the view of industrial organization that focuses on external factors the resource-
based theory tries to explain the frequency of performance among firms depending on firm-specific factors.
Moreover, the dynamic capabilities approach, as an extension of the resource-based view of the firm’s success,
states that the sustainability of the firm’s competitive advantage and performance depends on the firm’s ability
to renew resources as its external environment changes. Capabilities that are important for the firm’s
competitiveness and improved performance encompass the capability to sense and seize opportunities, and the
capability to reconfigure the firm’s resources.
_______________________________________________________________________________________
_______________________________________________________________________________________________
The domain of strategic management is probably to experience increasingly integration of various theoretical
models. So, created “a balance between internal and external consequences of complex relations in the new
competitive landscape”. Since it is according to the approach of dynamic capabilities, having worthy,
inimitable, rare, and non-substitutable resources without the capacity to replenish does not lead to outstanding
performance.
Core competencies are defined as separate business-level processes, giving the business an advantage over
competitors. Competencies are very important, but not sufficient for sustainable competitive advantage in
unstable markets. As it realizes that current competencies might become less valuable when competitors repeat
them or move to markets, underline the dynamic capabilities on the organization’s ability to maintain
profitability through Restructuring assets and competencies to remedy the conditions of changing market.
This capacity places a large premium on the ability of senior management to accomplish two basic tasks (1)
be able to carefully sense the changes in their competitive environment, (2) You should be able to work on the
opportunities and threats. Those two essential capabilities are at the core of the company’s ability to survive
and grow and represent the core of dynamic capabilities, so you will find that the gainers and the winners in
the global markets are firms which reply in a timely manner and have flexibility in the innovation and
management capability to Effective coordination and redistribution of internal and external competencies.
_______________________________________________________________________________________
_______________________________________________________________________________________________
CHAPTER 4
DEVELOPMENT OF DYNAMIC
CAPABILITIES
4.1. Organizational Capabilities vs. Dynamic Capabilities
4.1.1. Organizational Capabilities
An organizational capability can be defined as how the company can be able to manage its resources
effectively to earn an advantage over the competitors. The company's organizational capabilities should
concentrate on the business's ability to meet customer demand.
When firm’s assets are converged in integrated groups so that they enable special and distinctive activities to
be performed, these activities shape organization routines and processes or organizational competence
/capability. The stakeholder perceptions have commonalities with the organizational effectiveness framework.
To define priorities and organize processes in the short and long term, there should be a participatory decision-
making process supported by transparent and consensus-oriented systems. Systems must ensure efficient flow
of information, deference, and transparency. Leaders should consistently expound success in carrying out the
mission of the organization and constitute the future of the sector. Human Resource management policies and
processes should be clearly documented and communicated and the career development of members should
be a priority. Core services should reflect the organization’s comparative advantage. The association of these
activities should be market oriented, responsive to changing conditions and should evaluate its performance
on a regular basis.
_______________________________________________________________________________________
_______________________________________________________________________________________________
We can use financial planning to set goals and monitor performance, as it is an integral part of short- and long-
term organizational plans and appropriate financial performance measures. The organization should have
connections with a various range of industry stakeholders and must be recognized as an important and
competent representative of the section. The strategic management of the industry organization should in the
first instance develop organizational capabilities.
4.1.2. Dynamic Capabilities
Food industries are facing nowadays several factors and it’s subjected to rapid technological change, market
entry from global innovators, and volatility in market demand. Companies are unlikely to survive, when they
cannot expect or react to external confusion and instability exists. In volatile industries such as food industries,
the organizations need strategies, structures, and processes that enable agility and responsiveness in a shifting
competitive landscape.
The organization has to plan and build its capacity to tap current resources, capability exploitation, and engage
in building organizational capability. In essence, the organization is conceptualized to have absorptive capacity
to explore new possibilities arise in t external environment and exploit old certainties they faced.
Capability exploitation is a dynamic process include continued resource commitment. To elicit economic
returns from current resources, and to develop and build new capabilities, a certain capacity for dynamic
capabilities have to be established.
Organizational capabilities enable the organization to produce goods and services, dynamic capabilities guide
and facilitate the development of organizational capabilities by changing the underlying resource base in the
firm. We can suggest after all, that the dynamic capability perspective can be an assistance to management
endeavouring to build a powerful industry organization to promote competitiveness.
4.2. Designing for Dynamic Capabilities
Now we are going to discuss how the food businesses can put dynamic capabilities into action, it’s a matter
of how the organizational design play a role in building a capacity for sensing, shaping and seizing
opportunities in the external environment . We will focus on the plans and strategies that managers should
embrace to harness new organizational forms to build a capacity for open organization and self-organizing
process, which can quickly convert individual capabilities into actionable collective intellect, these favoured
by the fast-moving environments. We will discuss new design principles – such as polyarchy, social proofs,
_______________________________________________________________________________________
_______________________________________________________________________________________________
and new forms of open organization – that allow organizations to build dynamic capabilities for sustained
innovation in dynamic environments.
Food industries are facing nowadays several factors and it’s subjected to rapid technological change, market
entry from global innovators, and volatility in market demand. Companies are unlikely to survive, when they
cannot expect or react to external confusion and instability exists. In volatile industries such as food industries,
the organizations need strategies, structures, and processes that enable agility and responsiveness in a shifting
competitive landscape.
In markets that are volatile, the functional and operational routines that wheel the competition success in stable
environment become subject to rapid obsolescence. Even if a company’s advantages are inimitable due to
experience or proprietary knowledge, disruptive technologies and business models can blast the underlying
drivers of industry advantage, making traditional advantages irrelevant or out of step with market situation
and customer demand.
The dynamic capabilities view of competitive advantage disputes that success in volatile industries requires
higher-order capabilities that enable companies to sense, shape, and adapt to roving competitive landscapes.
Capabilities like product design and manufacturing, viewed as an important for dynamic capabilities, success
in volatile industries requires something more than organizational capabilities: namely, adaptive processes and
structures that enable companies to change their baseline capabilities, anticipate shifts in market demand,
develop and integrate new technologies, learn from market events, and foresee and capture new market
opportunities.
Competitive advantage in these markets requires a higher-order capacity to sense, shape and seize new market
opportunities. The sustainability of existing capabilities by continuously improve and develop them is not
enough, as the organization require some comprehensive and overarching capacity for developing new
capabilities that sense and respond to a highly changing marketplace. Perhaps it is not surprising that a few
pioneering companies have experimented with new organizational design, discovering new structures and
processes suited to continuous innovation.
The forms of market volatility emerging in recent years require organizations to differentiate their structures
globally rather than domestically, digitally as well as mechanically, virtually as well as physically,
continuously rather than occasionally. In order to get the strategy aligned along with the structure to be
developed, organizations have to think more cohesively about designing flexible techniques for structural
_______________________________________________________________________________________
_______________________________________________________________________________________________
differentiation and integration that enable the dynamic capabilities development. For the purpose of getting
our dynamic capabilities able for sensing, shaping, and seizing of market opportunities, strategies and structure
have to be continuously synched with each other whenever any change in the environment take place. It is no
longer a matter of “structure follows strategy” or “strategy follows structure” but of continuously orchestrating
strategies and structures.
4.2.1. Design Tools for Dynamic Capabilities
The fluctuations of the market demands and the turbulent environment that food industries are competing in,
requires the companies to find innovative solution to overcome these problems and succeed in their
completion. Companies must establish an information-absorbing culture within their teams and those specialist
who are beyond the boundaries of the organization. Managers have to give these people real autonomy to solve
problems and seize opportunities. A company that fails to differentiate its internal structure from others will
fall in their competition, finding it impossible to respond to turbulent environments.
At the same time, companies must bring together the knowledge and capabilities that sit with individuals and
teams to achieve the shared purposes of the collective enterprise. Beside the differentiation, companies must
embrace integration as well, this will prevent them from facing the perils of organizational chaos by getting
all individuals involved in the process of developing dynamic capabilities. These kinds of organizations can
produce great ideas, but lack the means to implement or commercialize them in the marketplace.
4.2.2. Differentiation by Polyarchy
In Western European political science, the term polyarchy poly "many", arkhe "rule") was used by Robert
Dahl to describe a form of government in which power is invested in multiple people. It takes the form of
neither a dictatorship nor a democracy. A polyarchy is a state that has certain procedures that are necessary
conditions for following the democratic principle. The opposite of polyarchy is autocracy, with power residing
in a single person; and there are many intermediate forms, including representative democracy. In economics
and organization theory, scholars have discussed polyarchy in the context of flat or decentralized forms of
organization in which autonomous individuals are empowered to make significant choices about the nature
and scope of their own work.
_______________________________________________________________________________________
_______________________________________________________________________________________________
It provides specialized individuals an autonomy at the boundaries of a scheme, thereby encouraging local
creativity, experimentation, and innovation, while minimizing bureaucratic barriers to project approval and
implementation. As such, polyarchy establish the grounds for dynamic capabilities by giving people the
freedom to sense, shape and seize new opportunities.
4.2.3. Integration by Social Proofs
In social psychology, a social proof is a psychological and social phenomenon where people assume the actions
of others in an attempt to reflect correct behavior in a given situation. The nature of social proofs is to induce
a kind of social infection in which beliefs, preferences, and practices spread through a population of
individuals. It’s not always that social proofs produce positive outcomes, and indeed many mechanisms of
social influence are known to produce dysfunctional outcomes such as groupthink, group polarization,
conformity, herd behavior, and the madness of crowds
The primary mechanism of social proofs is self-selection. By embracing this principle, the employee will have
the right to be involved in making decisions in align with top management, they choose their own projects and
vote with their feet. They assess opportunities in the markets to seize it more effectively, gather information
about existing projects and teams, and make their own judgments about whether to affiliate with existing teams
or form their own projects. However, encouraging the employee for taking decisions does not mean that
everyone makes best choices, or that social biases or politics are absent; indeed, people actively try to persuade
others to join their project teams. However, it suggests that the outright choices of individually-empowered
experts contain a powerful signal about the future direction of the marketplace – a form of collective wisdom
that serves as a barometer and guide to the strategic direction of the enterprise.
It’s not always that new innovations in the market can present themselves as obvious opportunities for capital
investment, and do not come with fully-formed business models for taking them it into action. Design tools
such as self-selection and the “rule of three” incentivize people not only to sense new opportunities, but to
shape those opportunities through social processes of haggling, influence and recruitment. New strategies and
business models emerge and evolve as individuals compete for resources and challenge each other over the
definition, scale, scope and implementation of proposed innovations. Social proofs like self-selection and the
“rule of three” serve as valuable filtering and enabling devices that redefine and transform new ideas, shaping
market opportunities in the crucial period before the company makes significant strategic commitments.
_______________________________________________________________________________________
_______________________________________________________________________________________________
4.2.4. Open Sensing, Shaping and Seizing
In volatile markets, organizational structures protect and exploit current strengths can promote strategic inertia,
or attract the company into “competency traps” in which they build increasing capabilities in things that no
longer matter. Executives must learn to depend on the attributes and judgments of people, as they work
individually, in groups, and toward the aims of the collective business. This will develop the core processes
that support dynamic capabilities for sensing, shaping and seizing.
Organizational designs that are based on polyarchy and social evidence as a tools for developing dynamic
capabilities, enable individuals and work-teams to build higher-order capabilities for sensing, shaping and
seizing opportunities. Self-selected team members engage more directly with organizational projects, and
social evidences promote communication and coordination. The new designs give individuals the resources
and incentives they need to build individual and joint capabilities, not only in technical areas, but in softer
skills such as communicating, managing struggle, and making sound judgments under uncertainty.
Immaculate attention to market opportunities in the external environments maximizes individual and collective
market knowledge, while enhancing the capacity both to explicate that knowledge and put it into practice. This
means engaging with external stakeholders through open forms of innovation that invite customers and other
actual and potential stakeholders into the company’s learning and innovation processes.
4.3. Dynamic Capabilities: Driving Strategy into Action
Core competencies are generally defined as discrete business-level processes fundamental to running the
business which give it an advantage over competitors. For sustaining the competitive advantage, competencies
are very substantial but not enough when the company operating in a fast changing markets. Dynamic
capabilities assert the organization’s ability to sustain profitability by reconfiguring assets and competencies
to address changing market conditions. When the existing competencies are imitable and the competitors find
a way to replicate them, it can be recognized that it may become less valuable as well for markets shift. It is
this ability to adapt and extend existing competencies that differentiates dynamic capabilities from
competencies.
_______________________________________________________________________________________
_______________________________________________________________________________________________
This ability for adaptation and extension of existing competencies places a premium efforts on top
management’s ability to accomplish two critical tasks. First, they must be able to accurately sense changes in
their competitive environment, including potential shifts in technology, competition, customers, and
regulation. Second, they must be able to act on these opportunities and threats; to be able to seize them by
reconfiguring both tangible and intangible assets to meet new challenges.
The firm’s ability to grow and survive over time, rely heavily on these two fundamental capabilities that are
at the core of a firm’s ability to represent the essence of dynamic capabilities. “Winners in the global
marketplace have been firms that can demonstrate timely responsiveness and rapid flexible product innovation,
coupled with the management capability to effectively coordinate and re-deploy internal and external
competencies.”
This requires that leaders possess both strategic insight and strategic execution. One without the other is
insufficient for long term success since the marketplace is ever changing. Management must create an
atmosphere that incubates an orchestrating between the insight and execution of the strategies that we have
developed. If a firm has resources and competencies but lacks these dynamic capabilities, it may make a
competitive return in the short-term but is unlikely to sustain this in the face of change.
Although theories of strategy can be elegant in their formulation, they are often less helpful in practice. Many
strategists, especially academics who develop the theory, typically don’t want to get their hands dirty with the
myriad of details necessary for successful execution. As a result, in many organizations a barrier exists between
strategists and operational executives. This has resulted in some firms establishing strategic planning
departments, to overcome the failure of the traditional strategic planning group to devise executable plans.
Therefore, timely strategic insights often go unrecognized by those line executives responsible for execution.
Compounding this problem, many organizational strategic planning and review processes take place
annually—not an immutable time frame that technology, customer needs, or competition adheres to. Firms
that do annual planning in fast changing markets and technologies are always behind. Worse, many operating
managers in competitive markets have little time for the reflection and analysis that good strategy requires.
_______________________________________________________________________________________
_______________________________________________________________________________________________
REFERENCES
- Ahenkora, K.(2012).Qualitative value chain analysis and strategic choices. Int.J.Buss.Mgt.Eco.Res., Vol
3(1), 429-431.
- Porter, M.E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New
York: The Free Press.
- Teece, D.J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic
Management Journal, Vol. 18:7, 509-533.
- Leornard-Barton, D. (1992). Core capabilities and core rigidities: A paradox in managing new product
development. Strategic Management Journal, Summer Special Issue, 13,111-125.
- Luo, Y., (2000). Dynamic capabilities in international expansion. Journal of World Business, 35 (4), 355-
378
- Hou, J. J. & Chien, Y.T., (2010). The effect of market knowledge management competence on business
performance: a dynamic capabilities perspective. International Journal of Electronic Business Management,
8(2), 96-109.
- D’Aveni, R.A., (1994). Hypercompetition: Managing the Dynamics of Strategic Maneuvering. New York:
The Free Press
- Eisenhardt, K.M. & Martin, J.A. (2000). Dynamic capabilities: What are they? Strategic Management
Journal,21,1105-1121.
- Amina Samnani (2014). Macro- Environmental Factors Effecting Fast Food Industry. Food Science and
Quality Management
- Maja Pervan, Marijana Curak, and Tomislava Pavic Kramaric (2017). The Influence of Industry
Characteristics and Dynamic Capabilities on Firms’ Profitability. Int. Journal of Financial Studies
_______________________________________________________________________________________

Research Report Updated - Afte Pallaragism

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Research Report Updated - Afte Pallaragism

Hochgeladen von

Copyright:

Verfügbare Formate

University of Petra

Faculty of Administrative & Financial Sciences

The Role of Dynamic Capability

CHAPTER 2: MANAGING FOOD SUPPLY CHAINS ………...…………………………………...…….6

CHAPTER 3: EXPANSION IN FOOD BUSINESSES ………………………………………...………......9

CHAPTER 4: DEVELOPMENT OF DYNAMIC CAPABILITIES ……………………......…………....14

The following research questions were addressed in this study:

1.2. Research Objectives

Our objectives in this research to:

1.3. Literature Review

MANAGING FOOD SUPPLY

2.1. The actors in a food supply chain

2.2. Types of Food Supply Chains

 Commodity- and producer-focused chains

 Consumer-driven value chains

2.3. Factors influencing Food Supply Chains

3.1. Strategic Development of the Food Businesses

3.2. Expansion Strategies in Food Industry

3.2.1. Increase your sales and products in existing markets.

3.2.2. Introduce a New Product.

3.2.3. Develop a New Market Segment or Move into New Geography.

3.2.4. Start a Chain.

3.2.5. Franchise or License.

3.2.6. Join Forces / Strategic Alliance.

3.3. From “Five Forces” to “Dynamic Capabilities”

4.1. Organizational Capabilities vs. Dynamic Capabilities

4.1.1. Organizational Capabilities

4.1.2. Dynamic Capabilities

4.2. Designing for Dynamic Capabilities

4.2.1. Design Tools for Dynamic Capabilities

4.2.2. Differentiation by Polyarchy

4.2.3. Integration by Social Proofs

4.2.4. Open Sensing, Shaping and Seizing

4.3. Dynamic Capabilities: Driving Strategy into Action

Das könnte Ihnen auch gefallen