Strategic Management Midterm
What are the differences between tangible and intangible resources? Which category of resources is morevaluable to the firm?
Tangible resources are assets that can be seen and quantified; whereas, intangible resources include assetsthat are rooted deeply in the firm’s history and have accumulated over time.Tangible resources include:
The value of tangible resources are often constrained because they are hard to leverage.
Intangible resources are difficult for competitors to analyze and imitate. These include:
Capacity to innovate
Reputation with customers
Perceptions of the product
Reputation with suppliers
For efficient, effective, supportive, and mutually beneficial interactions and relationships.Because its difficulty to be imitated and analyzed, intangible resources are more valuable to a firm.Palmetto was an early pioneer of personal data assistants (PDAs) and dominates that market space (in terms of market share) with its core product, the Palmetto Pidgy. Because this product category was entirely new to themarket, Palmetto had to internally develop the hardware and software sides of the business, and today is both amanufacturer of PDAs and a programmer and licensor of its PDA operating system software. Recently, however,the hand-held device maker's performance has taken a dive as a result of slumping sales and costly inventoryproblems. New large entrants are entering both the equipment and software sides of its business, putting further pressure on margins. Management is currently considering its options, including the break up of Palmetto intotwo separate, independent public companies-one devoted to hardware, the other software.
What primary business strategy issues does Palmetto face?
Palmetto internally develops the hardware and software sides of the PDA business, and today is both amanufacturer of PDAs and a programmer and licensor of its PDA operating system software. The main issuefacing Palmetto’s business strategy is treats by large competition entering the market. These firms arespecializing in either hardware or software. Palmetto’s business strategy is too broad to continuously competewith these specialized companies.2.
What primary corporate strategy issues does Palmetto face?