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buildings; reserves of raw
materials. And the key
indicators of physical resources are
market values of fixed assets, flexibility of fixed assets, and scale of plants.
Intangible
assets
are
things
like
brand equity, percent of repeat buying,
objective measures of comparative product performance (e.g. index customer
satisfaction), company reputation, organizational morale, technical knowledge. While
they are not assets that we can touch or see, they are very often critical in creating
competitive advantage.
Functional resources are also a valuable for a firm. The will face the challenge
of
determining
which
of
those
resources represent strengths or weaknesses, which
resources
generate
core
competencies
that
are
sources
of sustained
competitive
advantage.
2.3.
Branding
2.3.1.
The Value of a Brand
One
approach
to
introducing
a
strategic orientation is to change the primary
focus
from managing
short
term
financials
to
the
development
and
maintenance
of
assets
and
skills.
The
most
important
assets
of
a
firm are
brand
names,
which
is,
intangible
in that they are not capitalized and thus do not appear on the balance sheet.
Depreciation is not assessed, on “intangible assets” and thus maintenance must come
directly out of cash flow and short term profits.
For many businesses the brand name and what it represents are its most
important
assets,
the
basis
of competitive
advantage and of
future earnings streams.
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