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Economic Rent: Value Chain Capabiliti Es Resource Interior Resource Based View (VRIO) Future

Economic rent is defined as above average returns divided by average returns. Strategic definitions include seeking economic rent by striving for above average returns through abnormal behavior that adds value. The hourglass diagram shows that strategy occurs at the nexus where the interior capabilities and resources meet exterior industry and macro forces going into the future.

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Kiều Thảo Anh
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66 views1 page

Economic Rent: Value Chain Capabiliti Es Resource Interior Resource Based View (VRIO) Future

Economic rent is defined as above average returns divided by average returns. Strategic definitions include seeking economic rent by striving for above average returns through abnormal behavior that adds value. The hourglass diagram shows that strategy occurs at the nexus where the interior capabilities and resources meet exterior industry and macro forces going into the future.

Uploaded by

Kiều Thảo Anh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Economic rent
Economic rent = AAR/AR
(above average returns divided by average returns)
We have to strive for above average

Above Average returns

Average
returns

Economic
Rent

2. Definitions of strategy
Historical: strategy is warfare, always has a cost
Economic: Search for economic rent we have to strive for above average
Behavioral: Abnormal behavior that adds value, creates abnormal returns.
Search for previously unrecognized patterns (of technology, politics..)
3. The hourglass diagram and the strategic nexus

INTERIOR

at Nexus
strategy
occurs

Value
Chain
Resource Based View
(VRIO)

Capabiliti
es
Resource
Future

Big Deltas - demographic, technological,


socio-cultural,
Macro
EXTERIO
economic,
political-legal, global
Industry
R
Five
Forces
Nexus the point where any force meets and
the point of contact that goes on into the

future. This is where strategy occurs.

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