Question

Resources and capabilities can be classified into three groups:

a. Temporary Advantage: How long will it last? The emergent strategy should focus on how it can best be leveraged or extended.

b. Potential Advantage: The strategy/implementation should seek to remove the organizational constraints so the resource can be leveraged.

c. Sustained Advantage: The strategy should focus on how and where the resource/capability can be most effectively leveraged.

Please provide examples of strategy a company pursued under these three different types of advantages identified through internal analysis?

Answer 1

1. The resources are scarce, and the companies should use the scarce resources to the maximum. The companies can use the resources to make effective changes in the processes to match the current changes. For instance: TATA is a company that uses scarce resources in different fields to gain the overall advantage. The company has different fields of functioning, and it excels in all the fields and departments. It has adopted the strategy of using scarce resources to the maximum benefit of the company. It also increases the sales, and gains for a temporary period.

2. Potential advantage refers to eliminating all the hurdles in the process of efficiency and taking measures to use the resources at the maximum level. For instance: Starbucks is the company that eliminates all the inefficiencies and subsequently adopt the most suitable operation for the company. It also researches the opportunities and threats of the product in the environment to take necessary actions.

3. Sustained advantage is the most effective measure. It helps the companies to use the resources to the maximum benefit effectively. For instance, Kellogg uses the sustainable measures in each country according to the company's target market. In Asian countries, the company molds its operations and processes to satisfy the target market's needs and wants. The company has changed the composition of the product to fit in the Asian market. Hence, it is the sustained use of resources and capabilities.

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