Starbucks and Brasilian Coffee Beans

MUHAMMED BURAK CENGİZ

20142501015

1. Collis and Montgomery suggest two strategic implications of building resource-based competencies. Describe them, and give examples to illustrate them.

1. Compare Porter’s five forces analysis with the resource-based view in terms of their differences.

1.) First one is competitively valuable resources. Theory says that the companies which are in a certain industrsy, are different because of their strategic resources. A resource can be advantageous in a certain period, strategy or a company. This means every resource is not add same value for every company, time and managing style. To add value to resources company should give attention to the resources uniqless (inimitability), durability (longer durability means valuable resource), appropriability ( the benefits comes form value), sustainability (to continue of getting benefit from resource, continious resource is important), and competitive superiority (companies should not forget one activity can make them superior in the sector, but every activity is important and working on it otherwise other companies can take the superiority with another resorce).

 For that implication environmental factors, customers desires and values generally effective.

 For example when IBM discovered reasonable costly computer production, the importance of brand name in computer industry is lost its advantage.

Second one is strategic implications. In that part the strategy should determine under the light of resources. They should fit each other and appropriate. When the strategy started to perform it should not exploite resources. The strategy should invest, upgrade and leverage in resources.

For example Starbucks and Brasilian coffee beans. Starbucks were know that their tengible resource coffee beans are growing up in Brasil but Brasilians were not know how to plant and seed best beans. So that Starbucks determined a strategy which is educate Brasilians and invests on that lands to get better quality coffe beans and provide sustainability for their reasonable price  qualified beans.

2.) According to Porter’s 5 forces analysis; a company’s competitive advantage based of threat of entrants, power of suppliers, power of buyers, threat of substitute products or services, and rivalry among existing competitors. The profitability, superiority and sustainability in the sector is based on these environmental factors. On the other hand Collis and Montgomery’s resource based competency believes the companies’ tengible resources, intengible resources and organizational resources are determines the companies competitive advantages. Unlike 5 forces these theory is compelately based on internal assets and factors.