- whether it is weak or strong in protecting its capabilities - companies in the strong segment can benefit from both incremental and radical changes/innovation - for companies to get to the strong stage, they need dynamic capabilities which include their processes, their current position, and the paths available to it processes: refer to integration, learning, and reconfiguration/transformation - integration: efficiency and effectiveness of internal/external coordination - learning: finding ways to perform tasks better and faster. also identifies new business opportunities - reconfiguration/transformation: changing up the firms asset structure to adapt appropriately to its external environment position: - technological (know how and patents) - financial (e.g. cash position) - complementary (e.g. distribution channels and service capabilities) - locational paths: path dependencies: determined by their past. considers fixed costs e.g. overhead cost technological opportunities: determines their future if management is willing to invest criticisms: - no clear criteria to meet to be in each category, making all of this very subjective - doesn't actually tell the company what the companies could do to improve, even though doing nothing guarantees their decline

thanks a lot for explaining

Really useful, thank you

Great video! One question - Where would you place Fitbit in this model?

Very nice.

Super!!!!!

Summary: Dynamic Capabilities of Firms by David Teece and Gary Pisano Background: David J. Teece is a Professor at the University of California, and Gary Pisano is a Professor at Harvard Business School. They introduced the "Appropriability Regimes" model which explains how companies can prevent their innovations from being easily copied by competitors. Appropriability Regimes Model: Appropriability combines the concepts of property and replicability. It looks at the ease of replication of innovations and how effective intellectual property rights are at preventing imitation. The model has two main categories: Inherent Replicability (how easy/hard it is to imitate a product/service). Intellectual Property Rights (the strength of patents, trademarks, etc., which can be loose or tight). Four fields result from these categories, indicating if a firm's innovations are weak, moderate, or strong in protection: Weak: Easy to copy with loose intellectual property rights. Moderate (First Type): Difficult to copy, but with loose intellectual property rights. Moderate (Second Type): Easy to copy, but with strong intellectual property rights. Strong: Difficult to copy and protected by strong intellectual property rights. Examples: Weak Field: Standard clothes without trademarks or common industrial screws. First Moderate Field: IKEA's unique logistics system, or online platforms like Amazon and Alibaba that possess hard-to-imitate knowledge about their customers. Second Moderate Field: Pfizer's patented drugs, Apple and Lego's strong trademarks. Strong Field: Pfizer and Apple's research and development prowess, or IKEA's ownership of prime real estate. Strategic Dimensions of Firms: Teece and Pisano argue that firms need dynamic capabilities and categorize them under three strategic dimensions: Organizational and Managerial Processes: Integration: Coordination within and outside the company. Learning: Improvement via repetition and experimentation. Reconfiguration and Transformation: Adapting to changing environments faster than competitors. Position: Four assets: Technological (know-how and patents), Complementary (distribution channels, service capability), Financial (cash position, balance sheet), and Locational (geographic advantages). Paths: Past, present, and future routes a firm takes, influenced by fixed costs, core rigidities, and technological opportunities. Criticism: The model doesn't clearly define what qualifies as "loose" or "tight" in terms of intellectual property rights or clarify when replication is deemed easy or hard. It doesn't specify the competencies a company should acquire or the direction to pursue. The only clear advice is that doing nothing leads to a company's decline. In essence, the Dynamic Capabilities model emphasizes that firms need to innovate continuously and adapt to changing market environments to remain competitive. While the model provides a framework for understanding these dynamics, it has been critiqued for lacking specifics.

Really good video, thanks a lot. The narration could be a little more engaging/enthusiastic... Other than that I found it super helpful and I will be sharing it with some classmates. Thanks again.