BUS 478 Lecture 3: Bus478 Chapter 3

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 478
• Professor: Michael Favere- Marchesi

Document Summary

Internal analysis is a third step process: managers must understand the process by which companies create value for customers and profit for the company. A company has a competitive advantage over its rival when its profitability is greater than the average profitability of all companies in its industry. It has a sustained competitive advantage when it is able to maintain above- average profitability over a number of years. Distinctive competencies are firm-specific strengths that allow a company to differentiate its product from those offered by rivals, and/or achieve substantially lower costs than its rivals. Tangible resources are physical entities, such as land, buildings, manufacturing plants, equipment, inventory and money. Intangible resources are nonphysical entities that are created by mangers and other employees, such as brand names, the reputation of the company, the knowledge that employees have gained through experience and the intellectual property of the company.