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Resource vs capability?
Resource: what the firm owns or controls. Capability: what it can repeatedly do with resources. Think oven versus the ability to bake good bread with it.
What is a core competency?
A hard-to-assemble bundle of resources and capabilities. The DoorDash activity combines suburban density with routing, batching and data. Think recipe, trained people and suppliers working together, rather than one special oven.
What does each letter of VRIO ask?
Valuable? Rare? Costly to imitate? Organized to capture value? Apply them sequentially. Ask: does it help, do few rivals have it, is it hard to copy, and can we actually use it?
Valuable but not rare?
Competitive parity: relevant rivals possess a comparable resource. Like having a good oven when every nearby bakery has a similar one: useful, but not a special edge.
V, R and I yes; O no?
Uncaptured potential. The firm lacks the organization to fully exploit it. Like owning excellent equipment but lacking the training or system to use it well.
VRIN’s N vs VRIO’s O?
N: no strategically equivalent substitutes. O: organization that captures value. They test different problems. N asks “can someone do the same job another way?” O asks “can we turn what we have into real benefit?”
Causal ambiguity vs social complexity?
Causal ambiguity hides why success occurs. Social complexity involves relationships, culture and coordination that are hard to reproduce. Ambiguity: you cannot tell the secret of a café’s success. Complexity: you cannot simply buy its teamwork.
Primary and support activities?
Primary: inbound logistics, operations, outbound logistics, marketing/sales, service. Support: procurement, technology, HR and general administration. Think of the order’s journey, plus the buying, people and planning work behind the scenes.
Economic value created?
V − C. V is perceived customer value, C is production cost. V is not the selling price. Think “benefit worth to the buyer minus resources needed to deliver it,” not money the seller keeps.
When does extra differentiation create more economic value?
When ΔV exceeds ΔC. More features alone do not establish the result. Spending 8 more to provide 15 more units of perceived benefit creates 7 more value.
Three value drivers?
Product features, customer service and complements. A better camera is a feature; helpful support is service; a useful app store is a complement.
Scale vs learning vs experience in this course?
Scale: current-period volume. Learning: repetition in the same process. Experience: changing methods or technology. Make more sandwiches; get faster at the same recipe; switch to a better production method. Keep those three separate.
Economies of scope?
Producing offerings jointly costs less than separately, such as shared reservations and loyalty infrastructure. Like one kitchen sharing equipment to make both soup and sandwiches.
Minimum efficient scale vs diseconomies?
Minimum efficient scale is where unit cost stops falling. Diseconomies mean further size increases unit cost through coordination or complexity. First, bigger stops lowering cost per item; later, extra size may create costly delays and confusion.
Blue ocean vs stuck in the middle?
Value innovation redesigns factors so value rises and cost falls. Being stuck means neither a low enough cost nor a sufficiently distinctive offering. Blue ocean changes the design so savings fund useful benefits. The middle lacks either a convincing price or benefit.
The four I’s?
Idea, invention, innovation, imitation. Innovation includes commercialization/useful implementation. Imagine a reminder bottle: think of it, build it, bring it into use, then rivals copy it.
Five life-cycle stages?
Introduction, growth, shakeout, maturity, decline. Adjust competencies, buyer focus and strategy to the stage. Think first launch, growing demand, weaker sellers dropping out, a familiar crowded market, then shrinking demand.
Where is the main chasm?
Between early adopters and early majority. Practical complete solutions, references and standards help reach the early majority. The first group wants the new gadget; the next wants proof it works reliably in normal life.
Adopter shares in order?
2.5%, 13.5%, 34%, 34%, 16%: enthusiasts, early adopters, early majority, late majority, laggards. These are shares of market potential, not a claim that everyone buys at the same time.
Course innovation matrix?
Existing tech/existing market: incremental. Existing tech/new market: architectural. New tech/existing market: disruptive. New tech/new market: radical. Always ask two things: is the technology new, and is the market new? Keep the lecture’s quadrant names.
Why may incumbents resist?
Economic incentives and cannibalization, organizational inertia, ecosystem embeddedness. They may fear hurting their own sales, be stuck in old routines, or depend on partners tied to the old method.
Network effect vs scale?
Network effects change user value as participants change. Scale lowers unit cost as volume rises. More friends on a messaging service can help users. More units sharing one rent bill lowers unit cost.
Pipeline vs platform?
A pipeline makes/sells through a linear chain. A platform coordinates external producers and consumers and considers ecosystem value. A bakery makes the bread. A marketplace helps independent sellers and buyers find and deal with each other.
Why can Starbucks’s app produce parity?
Team 3 says rival apps exist, so value does not establish rarity. Its integration concern also questions consistent value capture. Having an app helps, but a feature everyone has does not by itself set the business apart.
How should you interpret Starbucks partner culture?
Team 3 marks VRI yes, O no and calls it temporary. Explain the organization gap as uncaptured potential; unionization alone is not proof of failure. A strong culture can have potential that staffing, systems or employee relations do not fully put to work.
Airbnb’s cross-side loop?
More suitable hosts attract guests; guest demand attracts hosts. Quality, trust and host participation condition that loop. Good places attract guests; enough guests make listing a place worthwhile for hosts.
Airbnb fee-cut tradeoff?
Lower fees may raise demand, but reduce revenue per transaction. Standards may improve trust while burdening hosts. Guests may pay less, while Airbnb earns less per booking and hosts do more work to meet standards.
A strong written response?
Clear claim, accurate framework, specific case evidence, causal explanation, tradeoff, and an action/measure when recommending. Say what you think, name the idea, show a fact, explain why it matters, then give the downside and a way to check results.