Assalamualaikum..
Sincerely from
my bottom of heart, I hope all my readers are doing okay. Today’s update, I
would like to continue my posting and sharing about what I have learned in my
Strategic Management and Operation class for this week. The topic that I mind
to sharing today is the Elements of Strategic Management which I will focus on
Competitive advantages.
What is the
competitive advantage?
Competitive
advantage allows an organization to outperform its competitors. An organization
gains competitive advantages when they are able to perform or doing an activity
that other company are unable to duplicate them. While sustained competitive
advantages refers to a competitive advantage that an organization can maintain
for a long period of time.
In this
topic, I learned about Resources-based-view which is strategic management idea
that each firm has their own unique and possesses resources and capabilities
that provide the basis for its competitor advantages. Resources are referring
to inputs such as equipment, human resources or process and that input can be a
production process. They can be divided into 3 categories: tangible, intangible
and human resources.
Tangible
resources are assets that can be seen such as materials while intangible
resources are assets which we cannot be seen such as knowledge. Human resources
will include people’s skills, abilities and experiences.
According
to RBV theory (resources-based-view), a resource can only be a source of
competitive advantages when it is unique. A characteristic of unique resources
are:
VALUABLE
RARE
HARD TO IMITATE AND SUBSTITUTE
ORGANIZATION HAS THE ABILITY TO EXPLOIT THE RESOURCES
The more of
such qualities the resources has, the more important it is a source of
competitive advantage.
This is the
explanation of the V.R.H.O
Valuable
would answering the question of does the resource create value for the firm in
delivering the firm’s products and services.
Rare is
something that we find that the current or potential competitors possess this
resources or not. A resource should be rare to be a unique and valuable.
Hard to
imitate and substituted is a resource that we find it is hard for the current
and potential competitors to develop a substituted for this resources.
Organized
to exploit is the question regarding does our firm have the necessary systems,
policies, procedure and processes to take full advantages of this resources in order to develop it into a competitive advantage?
To become a
good organization and to have the strength among the competitors, a firm should
follow the RBV Theory to gain the innovative resource and gain profits for the
company. That’s all from me for this week lesson, till then wassalam.
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