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The analysis of resources and capabilities: application
Published on April 27, 2022 7 min
Other Talks in the Series: Key Concepts: Introduction to Strategy
Hello and welcome to this series of introductory talks on business strategy. My name is Robert Grant. I'm a professor of strategic management at Bocconi University in Milan, Italy. I'm also the author of 'Contemporary Strategy Analysis', a leading strategic management textbook used in business programmes throughout the world.
Let's go back to the video streaming industry, where the two most prominent competitors are Netflix and Disney. How do their resources and capabilities match up? What these two displays show are the resources and capabilities of each firm based on their strategic importance and relative strength. What we see are two very different patterns of resources and capabilities. Netflix's key strengths tend to be built around information technology. Aspects, such as its curating capability, its ability to provide recommendations to viewers and the ability to be able to make it easy to select amongst the vast array of offerings. In terms of production capability, Netflix seems to be much stronger in terms of TV series than it is in terms of feature movies. Its key weaknesses are much more around its content library and its ownership of key resources, such as franchises and characters. Disney shows a very different pattern. Disney is the largest and longest established entertainment giant in the world. Its strengths are much more around content, such as its franchises and its characters, which range from Mickey Mouse to the Star Wars characters, to the Pixar characters, and so on. Its production strengths are much more in terms of movies rather than TV, and its weaknesses are primarily around the area of information technology. What do these different patterns of strengths and weaknesses for these two companies imply about their strategies?