This Chaper starts by establishing the importance of rigorous casual analysis pushing back
from top-level performance outcomes through the logical chain of causality that accounts for
those outcomes. This process ultimately exposes the fundamental relationship between resources
and demand, revenues, costs and profits. The Chapter shows how equivalent principles operate
in public services and voluntary organisations. This resource-driven perspective is compared
with other approaches to understanding and forecasting performance. Links are made to the
industry-forces view of performance, cost-leadership and differentiation, the value-curve
approach and the resource-based view of strategy (RBV).
This Chapter includes connections to the following Strategy concepts: Value-Curve,
Value Chain, Generic Strategies, Industry Forces and Vision & Mission.
Key issues addressed
- The need for rigorous causal explanations of performance
- From performance outcomes to the resources that drive demand and supply, revenue and costs
- Measures of performance for a whole time-period vs. quantities of resources at an instant in time
- Critical importance of tracking numbers over time, including non-business cases and functional challenges
- From understanding history to estimating future performance - market-based and resource-based explanations and forecasts
- Strategy dynamics and the resource-based view of strategy
- Identifying, specifying and measuring resources – and definitions for resources and capabilities
Lecture segments associated with this chapter are:
Class 2.0 - Welcome and class overview - (9 min)
Also associated with this segment is a short exercise showing how a brand's sales volume depends both on consumers who
want the product and retail stores making it available
Class 2.1 - Detailed strategy example - an airline - (14 min)
Also associated with this segment are two exercises using mystrategy that look at profit generation by Ryanair,
tracing each cost and revenue item back to its' key resource.
Class 2.2 - Detailed issue example - a law firm - (3 min)
Class 2.3 - Standard types of tangible resource - (5 min)
Class 2.4 - Public service and non-profit organizations - (9 min)
Class 2.5 - The resource-based view of strategy (RBV) - (5 min)
Notes:
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If you are subscribed to one or more segments associated with this chapter suggestions for learning more,
and making use of the ideas and frameworks in class 2/chapter 2 are provided.
Associated with segment 2.0 is a short exercise showing how a brand's sales volume depends both on consumers who want
the product and retail stores making it available
Associated with segment 2.1 are two exercises that look at profit generation by Ryanair,
tracing each cost and revenue item back to its' key resource.
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