Core capabilities refer to the unique and supreme abilities based on a company’s routines, skills and processes (Bradfield et al., 2005). A company or a firm should never outsource its core capabilities because it will interfere with its normal routines and processes. In addition, outsourcing is an expensive activity since assets from outside a firm are available at a higher cost compared to what a firm owns. On the other hand, if a firm faces the challenge of a supplier who is willing to supply his/her goods at a lower price based on these core capabilities, a company should consider several factors. For example, whether the overall profit will be influenced by buying those products or not, whether its own products will be at a risk of losing market or whether its routine will be affected. Careful consideration of these issues will enable a firm to make the right decision.
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In a university, the equivalent to corporate planning would be the overall vision of a university, for example, its long-term objectives, student and staff performance and its management. Similarly, the equivalent to strategic business unit would be the identification of job opportunities for graduates and ensuring that their students are able to compete with others in the workplace in terms of skills and knowledge. The equivalent to functional planning in a university would be strategies used to manage critical resources and strategies used to identify skills and capabilities of students, lecturers and other staff members.
Within a school, capabilities mainly refer to school routines, pupils and teachers’ abilities as well as learning programs and processes that are unique to a particular school.
A critical consumer is a consumer whom a firm depends on for its success. For example, if a firm is handling human food then a critical consumer will be people because without them there would be no one to consume its products. Sometimes it makes sense for a firm to rely on retail stores, distributors and buyers rather than on the end consumer. For example, there are instances when consumers are far from a firm but products cannot be transported to them because of high transport costs, a firm has to increase their market shares.
Value proposition refers to tangible and intangible goods that customers expect from a firm (Delmar & Shane, 2003). For example, for two competing products RIM’s the Blackberry and Apple’s iPhone, customers expect them to be of high quality, affordable and durable. These two products contain these properties and, therefore, serve as an evidence of value proposition. Core capabilities can sometimes be liabilities, rather than assets to a firm (Delmar & Shane, 2003); for instance, when faced with a problem that cannot be solved internally but requires outsourcing of skilled experts. When a firm faces the problem of lack of fit, its short-term reaction should be to stop producing that particular product. Lack of fit causes losses to a firm because the product market will reduce or disappear completely. When a firm is trying to improve its fit, it has to incur extra expenses activities like exploring the available market, changing the product partially or completely in order to fit the consumer, and more. These activities are costly and, therefore, a firm will be required to strain its resources.
The concept of order winners, order qualifiers and order losers mainly helps to develop an attractive pizzeria business by using it in order to attract more customers. In a business, metrics regards to primary methods of communication because they provide an overview of what, how and in what measure and quality a firm carries out its activities.
There is a relationship between metrics and the strategies applied in a firm because by looking at the key metrics, one can have an overview of what strategies need to be in place. The element of the measure in a metric is important, as it gives the amount or the quantity of products or services a firm produces. Also, the standards are important because they meet consumers’ or buyers’ expectations. Similarly, rewards are also important because they show how the firm benefits from its activities in terms of profits and performance. A metric will not be effective enough without the three elements together.
Sustainability is important for business models because it ensures that the produced goods are sustainable and will not run into issues like lack of market in future or reduction in quality etc. (Bradfield et al., 2005). It affects the identification of the critical consumer, as it considers the future of the product and the availability of the consumer. For example, Timberland Shoes Company knows that its market is sustainable because people will always keep buying the shoes.
There is a need for the four dimensions of the scorecard because they complement each other.