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Strategic Management
, Sixth Edition
Charles W. L. Hill, University of Washington
Gareth R. Jones, Texas A&M University
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| | Chapter Objectives
Chapter 3:
Internal Analysis: Distinctive Competencies, Competitive
- Examine the internal causes of competitive success and failure.
- Show how effective strategies create distinctive competencies, including resources and capabilities, which then aid a firm in achieving competitive advantage.
- Describe the process of value creation, using the concepts of pricing, demand, costs, and differentiation.
- Familiarize students with the concept of the value chain, and show how the different value-creation activities of a company fit together.
- Explain how distinctive competencies lead to superior efficiency, quality, innovation, and responsiveness to customers, which in turn allow a company to differentiate its products and lower its costs.
- Describe how competitive advantage leads to higher profitability, using financial measures.
- Identify the factors that influence the durability of a company's competitive advantage, including the height of barriers to imitation, the capability of competitors, and industry dynamism.
- Explain the role played by organizational inertia, past strategic commitments, and the Icarus paradox in the failure of many formerly successful companies.
- Discuss the steps that companies can take to avoid failure and sustain a competitive advantage.
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