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Part D. Evaluate the Company's tangible and intangible
resources? Which are more
important as a source of competitive advantage? Why?
Tangible Resources
y Financial Resources: After years of putting money into other
markets and
concentrating their financial resources in established
alliances, Sun Microsystems leveled outin fiscal years 2004 and
2005. They dont really have any borrowing power because themajority
of their collateral assets are inventory. Also, with each
administrator having
multiple titles (founder, chair, CEO, and acting COO, CFO, etc.)
there are little resources forgenerating funds internally.
y Organizational Resources: It seems as though the majority of
the time specified in thecase, that there was a decentralized
organizational hierarchy. That is, until it reachedMasood Jabbar
and then it became uber-centralized. The business managers, US and
foreign,
answered to Jabbar who then answered to McNealy.
y Physical Resources: Software, Hardware, and Service systems;
an established chip
maker
y Technological Resources: Excessive amounts of research and
development
Intangible Resources
y Human Resources: McNealy still with the company provides
stability and a sense of
where to go based on where the company has been. Jabbar who had
the foresight of themarkets that needed to be introduced to the
company.
y Innovation Resources: Other than the research and development
that has taken the lifeof the company to develop and expand, there
is not much else in Sun Microsystems backpocket.
y Reputational Resources: loyal customer base, known for The
Network is theComputer
Sun Microsystems is the iPhone of the 1990s and early 2000s.
Their products have the same
components as the more cost-effectively made models but Sun
marketed the fact that they hadthe higher-end materials inside
their products. Technological advancements led to
performance improvementsmaking use of these advances and using
various sources ofleverage to lower cost structures, many firms
were able to offer products similar to Suns, but at
a fraction of the price (pg 306).
Part E. What are the main capabilities of the Company? Does the
Company have a core
competence?
Sun has the technological ability to build their products
without relying on third-partymanufacturers for the majority their
parts. This does not serve as a core competence but acts as
the opposite since this makes it impossible for Sun to lower
their costs and in turn to lower thecustomers price.
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They do have an excessive amount of research and development
that could one day lead to acompetitive advantage but Sun is going
to need to develop something based on their research in
order for it to be useful.
Core competencies are defined as resources and capabilities that
serve as a source of a
firms competitive advantage over rivals. Thus, core competencies
are groupings ofresources and capabilities. Not all of a firms
resources and capabilities are corecompetencies.
Part F. Does the Company have a sustainable competitive
advantage?
Valuable Capabilities: agree that Sun does not have any. Too
much is wasted on R&D and notenough on making a marketable and
affordable product
Costly to Imitate: agree here as well. Many competitor companies
are producing the same
things as Sun at fractions of the cost.
Non-substitutable: as a service, Sun is non-substitutable. Their
product is the completepackage, whereas other companies put
together a piece of their hardware with someone elses
operating system and then the customer puts that assembled
product on a network of theirchoosing. As a product, any other
computer company has the same basic functionality with their
product as Sun can claim.
Part G. SWOT ANALYSIS
Strengths: established as a company and a service
Weaknesses: reliance on markets outside of the US
Opportunities: Java Enterprise System
Threats: continuance of operations with Intel
