Managing Capabilities Essay Example | Topics and Well Written Essays - 3000 words

Managing Capabilities - Essay ExampleIn the first part, the study entrust try to identify the concept of resource based view, and importance of capabilities for the sustainable competitive prefer of an scheme. This willing facilitate in developing theoretical background of this paper. Resources capabilities of Walmart will be critically analyzed and the strategies will also be evaluated. In the last part, the study will analyze strategic capabilities of Walmart in damage of respect chain analysis and VRIN and Ratio Analysis. Organizational Resource and Capabilities Seminal research has suggested that, competitive receipts should be measurable for companies otherwise it will be hard for companies to understand the scalability of the vantage that can help them move ahead in competition (Porter, 1980). According to Porter (1985 and 1991), companies can achieve competitive advantage with the help of cost leadership, product differentiation and by catering to demands of customers i n focused manner. In arrange to establish a competitive advantage every organizations plans and implements strategies. The aim is to outperform their competitors and gain a high profit within the industry. A superior competitive advantage can be achieved by creating to a greater extent values, which in turn depends on the resources and organizational capabilities to utilize these resources (Besanko et al, 2003). Sustainability of the organizational strategies is very essential for long line growth (Cullen and Parboteeah, 2005). Sustainability is critical and it implies that the strategies are not easily attacked or neutralized by the competitors (Aaker, 1989). It also ensures a persistent competitive advantage even if potential entrants or competitors disrupt by imitating or neutralizing the strategies espouse (Barney, 1991). The resource based theory was developed during early 1990s and according to this theory each organization is a pool of resources and capabilities. These re sources and capabilities determine the performance and strategies of a company. If organizations start having resources similar to each other, then the value created by these firms will be similar and there will be no competitive advantage in the concerned industry. A resource based view of a firm thrust upon path dependency and heterogeneity. This is because every organization has a unique resource bundle. The theory also argues that to retain a sustainable competitive advantage, a company should have resources and capabilities that are valuable, not substitutable, imperfectly mobile and awkward to imitate. These four resources can lead to differences in the capabilities and the strategies followed by the companies and can be responsible for a sustainable and competitive environment. These characteristics can be reinforced or induced through isolating mechanisms (Rumelt, 1984). These mechanisms are the forces that adjust the duplication or neutralization of competitive activitie s of other organizations. This isolating mechanism consists of two groups. The first is impediments to mistaken which means strategies that block the potential entrants