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1
Daily Quote

• It is not enough to be busy. So are the ants.
  The question is What are we busy about?
• Henry David Thoreau

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Announcements

• Next class
• Airline Strategy Session Three
• Next Friday
• Test 1
• Chapters 1-5
• Multiple-choice/true-false

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Agenda

• Current Event Three Team Three
• Chapter Four

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Chapter 4 Firm Analysis (i.e. the inside out
approach)

• By Adam D. Bailey

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Wal-mart

• Annual sales 50 greater than Target, Costco,
  Sears and Kmart combined.
• Largest private employer
• Would be 30th largest nation (economy)

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Resources and Innovation

• P G

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Internal Environment
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Conducting and Internal Analysis

• Strengths
• Weaknesses

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Resources

• Tangible resources
• Intangible resources

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Value
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Resource Portfolio
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Gaining and Maintaining Resources

• Red Sox
• Resources (players) are acquired and disposed.
• The Home Depot
• Acquire resources by buying a company (White Cap)
• Nissan
• Develop resources and creates capabilities
• Develop flexible manufacturing and integrates
  suppliers in manufacturing process

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Resources as Options

• Options
• Real Options

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Capabilities

• GE, Apple, and PG
• RD capabilities
• Shuffle Master
• Invests 12 of Rev. into RD (more than
  competitors
• (I, H, H. 2006. pp. 88-89).

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Creating Core Competencies Through Resource
Management
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Core Competencies

• Characteristics that can bring competitive
  advantage
• Valuable
• Shuffle Master card sorter, saves Casinos money
• Rare
• Honda- four models on Civic platform
• Difficult to imitate
• R D combination of many factors- labs, people,
  etc.
• Nonsubstitutable
• Dell corporate after sales service direct-sales
  ability
• (I, H, H. 2006. pp. 90-91).

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Competitive Advantage
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The Value Chain

• Value chain
• Benchmarking
• Primary activities
• Support activities

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The Value Chain
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Outsourcing
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Example of Outsourcing a Function
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Outsourcing Pros and Cons
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Resources and Performance