Asset specificity is the degree to which an asset is useful across multiple situations and for multiple purposes. It may be equipment designed to have a single function or labor trained to perform a single task. … Customized computer software is an example of a highly specific asset.

What are three types of specialized assets?

They come in three types: site specificity, physical-asset specificity, and human-asset specificity.

What are complementary assets examples?

Examples of complementary assets include marketing, sales, human resource management, office space, information technology, transportation, manufacturing, and sales channels. … Also noteworthy is that such complementary assets may, or may not, be a competitive advantage of the purveyor of the primary asset.

What is dedicated asset?

Dedicated assets, i.e. a discrete investment in a plant that cannot readily be put to work for other purposes.

What are the types of asset specificity?

Williamson describes five other Page 8 different types of asset specificity: site specificity, physical asset specificity, human asset specificity, temporal specificity and brand name capital (Williamson, 1991).

What are the four quadrants of the core competence Market Matrix?

• Raw Materials.
• Components &Intermediate Goods.
• Final Assembly & Manufacturing.
• Marketing & Sales.
• After-Sales Service & Support.

What are the main types of corporate diversification?

• Concentric diversification.
• Horizontal diversification.
• Conglomerate diversification (or lateral diversification)

What is high asset specificity?

The degree to which an asset can be used for different purposes. High specificity means that there is little opportunity to use an asset for anything other than its initial intended purpose. Low specificity means that an asset has many possible different uses.

What is physical asset specificity?

1. Physical-Asset Specificity Equipment and machinery that produce inputs specific to a particular customer or are specialized to use an input of a particular supplier are examples of physical asset specificity.

What are discrete assets?

1 separate or distinct in form or concept. 2 consisting of distinct or separate parts. 3 (Statistics)

Article first time published on

What do you mean by complementary asset?

Complementary assets are assets, infrastructure or capabilities needed to support the successful commercialization and marketing of a technological innovation, other than those assets fundamentally associated with that innovation. The term was first coined by David Teece.

What assets are complementary assets?

Complementary assets refer to the firm’s assets or capabilities [rather than technology or intellectual property (IP)] necessary for successfully commercializing technologies, which include manufacturing capacity, distribution channels, after-sales service, brands, and complementary technologies (Teece, 1986).

What are organizational complementary assets?

Complementary assets are those assets required to derive value from a primary investment (Teece, 1988). … These investments in organization and management are also known as organizational and management capital.

Is a car a firm specific asset?

Entrepreneurs (companies) often use their own cars for business purposes, which are recorded as a part of the company’s fixed assets. Such cars are either owned by the particular entrepreneur (as an economic or a legal owner) or are just possessed by them (personal cars purchased through the financial lease).

What are the three main methods of procuring inputs?

• Spot Exchange.
• Contracts.
• Vertical Integration.

What do you mean by specificity?

Definition of specificity : the quality or condition of being specific: such as. a : the condition of being peculiar to a particular individual or group of organisms host specificity of a parasite. b : the condition of participating in or catalyzing only one or a few chemical reactions the specificity of an enzyme.

When should an organization diversify?

Entering an unknown market puts a significant risk on a company. Therefore, companies should only pursue a diversification strategy when their current market demonstrates slow or stagnant future opportunities for growth.

When should an Organisation diversify?

First and foremost, companies diversify to achieve greater profitability. Diversification is used by businesses to help them expand into markets and industries that they haven’t currently explored. This is achieved by adding new products, services, or features that will appeal to the customers in these new markets.

What are the three 3 reasons firms choose to diversify their operations?

There are four most often cited reasons for diversification: the internal capital market, agency problems, increased interest tax shield and growth opportunities.

What is the purpose of the core competence -- market Matrix?

What is the purpose of the core competence-market matrix? To provide guidance regarding how to diversify in order to grow the company.

How does LYFT benefit from its strategic alliances with GM and Waymo?

How does lyft benefit from its stategic alliances with GM and Waymo? It allows Lyft to more effectively compete against Uber, its more powerful competitor. How can firms build alliance management capability?

What three of the following are the primary benefits of horizontal integration?

Undergoing horizontal integration can benefit companies and typically takes place when they are competing in the same industry. The advantages include increasing market share, reducing competition, and creating economies of scale.

What is a location specific asset?

Location-specific advantages or LSAs are those location-specific market features and/or factors of production that enable a firm to achieve an improved financial outcome from the provision of the same product or service relative to alternative locations.

Which of the following are types of supplier asset specificities choose four?

The four types of asset specificity identified by Williamson (1991) are considered in this research, including physical asset, human asset, dedicated, and temporal.

What is a transaction specific asset?

1. This is the extent to which investments made to support a particular transaction or relationship have a higher value to that transaction or relationship than they would have if deployed for any other purpose.

What is human capital in economics?

The term human capital refers to the economic value of a worker’s experience and skills. Human capital includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.

How do you solve hold up problems?

A solution to the hold-up problem is vertical integration such as a merger in which all parts of the body are being produced internally rather than outside. Vertical integration shifts the ownership of the organizational asset of the firm and therewith creates more flexibility and avoids potential of a hold-up.

Why are contracts incomplete?

Contracts can be considered incomplete, from an economic perspective, when some aspect of parties’ payoff-relevant future behavior or some relevant payoff in future contingencies is unspecified in the contract and/or unverifiable by third parties.

What are the types of assets?

When we speak about assets in accounting, we’re generally referring to six different categories: current assets, fixed assets, tangible assets, intangible assets, operating assets, and non-operating assets. Your assets can belong to multiple categories. For example, a building is an example of a fixed, tangible asset.

What is the difference between a financial asset and tangible asset?

The main difference between the two is that physical assets are tangible and financial assets are not. … Physical assets also require maintenance, upgrades and repairs, whereas financial assets do not incur such expenses.

What's the most liquid asset?

Cash on hand is considered the most liquid type of liquid asset since it is cash itself.