RBV - (Truncated) - Cir

Resource-Based View of the Firm
 Resource-based view -- helpful perspective for

understanding strategic management and its
activities
 Two perspectives
The internal analysis of phenomena within a company
An external analysis of the industry and its competitive
environment
1-1
 Firm’s resources must be evaluated in

terms of how valuable, rare, and hard they
are for competitors to duplicate
 Three key types of resources

Tangible resources
Intangible resources
Organizational capabilities
1-2
1-3
Types of Resources:
Tangible Resources
 Relatively easy to identify
 Financial resources
Firm’s cash accounts
Firm’s capacity to raise equity
Firm’s borrowing capacity
 Physical resources
Modern plant and facilities
Favorable manufacturing locations
State-of-the-art machinery and equipment
1-4
Types of Resources:
Tangible Resources
 Technological resources
Trade secrets
Innovative production processes
Patents, copyrights, trademarks
 Organizational resources
Effective strategic planning processes
Excellent evaluation and control systems
1-5
Types of Resources:
Intangible Resources
 Difficult for competitors (and the firm itself) to

account for or imitate
Human
Experience and capabilities of employees
Trust
Managerial skills
Firm-specific practices and procedures
1-6
Types of Resources:
Intangible Resources
 Innovation and creativity

Technical and scientific skills
Innovation capacities
 Reputation
Brand name
Reputation with customers
Reputation with suppliers
1-7
Types of Resources:
Organizational Capabilities
 Competencies or skills that a firm employs to

transform inputs to outputs, and capacity to
combine tangible and intangible resources to
attain desired end
Outstanding customer service
Excellent product development capabilities
Innovativeness of products and services
Ability to hire, motivate, and retain human capital
1-8
Firm Resources and
Sustainable Competitive Advantages
 Resources alone are not basis for competitive

advantages, nor are advantages sustainable
over time
 Resources or capabilities may help firm to

increase revenue or lower costs
Only temporary advantage
1-9
Firm Resources and
Is the resource or Implications

• Neutralize threats and
capability… exploit opportunities
Valuable • Not many firms possess
Rare • Physically unique
Difficult to imitate or • Path dependency
substitute • Causal ambiguity
• Social complexity
• Firm has complementary
resources to optimize
Organizationally capability
Activatible?
1-10
Firm Resources and
 Is the Resource Valuable?

Resources are valuable when they enable a firm to
formulate and implement strategies that improve its
efficiency or effectiveness
SWOT matrix suggests firms improve performance

only when they exploit opportunities or neutralize
threats
1-11
Firm Resources and
 Is the Resource Rare?

If competitors possess same valuable resource,
not source of competitive advantage
Common strategies based on a resources is not
an advantage
Some strategies require mix of resources –
tangible assets, intangible assets, and
organizational capabilities
1-12
Firm Resources and
 Can the Resource Be Imitated Easily?

Inimitability is key to value creation
Constrains competition
Competitors will eventually find a way to copy

valuable resources
Advantage based on inimitability won’t last forever
1-13
Firm Resources and
 Can the Resource Be Imitated Easily?

Managers can develop strategies around
resources that have one or more of the following
four characteristics:
Physical Uniqueness
Path dependency
Causal ambiguity
Social complexity
1-14
Firm Resources and
 Are Substitutes Readily Available?

Must be no strategically equivalent valuable
resources that are themselves not rare or inimitable
Substitutability takes two forms:
Substitute similar resource to implement same
strategy (In-person vs. Video Training)
Very different resources can become strategic
substitutes (Internet vs. Brick & Mortar facilities)
1-15
Firm Resources and
 Is the Capability Organizationally Activatable?

Firm must have access to complementary
resources to maximize capability potential
Types of Complementary Resources Include:
Financial Capital
Production/Manufacturing Facilities
Marketing KSAs
Distribution Networks
1-16
Criteria for Sustainable Competitive
Advantage and Strategic Implications
Is a resource or capability…
Valuable Rare Inimitable/ Activatable Implications
Substitute for Competitiveness
No No No No Competitive disadvantage
Yes No No No Competitive parity
Yes Yes No No Temporary competitive
advantage
Yes Yes Yes Yes Sustainable competitive
advantage
Exhibit 3.7 Criteria for Sustainable Competitive Advantage and Strategic Implications
Source; Adapted from J. Barney, “Firm Resources a Sustained Competitive Advantage, ‘ Journal of
Management 17 (1991), pp. 99-120. 1-17

RBV - (Truncated) - Cir

Uploaded by

Copyright:

Available Formats

RBV - (Truncated) - Cir

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

RBV - (Truncated) - Cir

Uploaded by

Copyright:

Available Formats

Resource-Based View of the Firm

 Resource-based view -- helpful perspective for

 Firm’s resources must be evaluated in

 Three key types of resources

 Relatively easy to identify

 Difficult for competitors (and the firm itself) to

 Innovation and creativity

 Competencies or skills that a firm employs to

 Resources alone are not basis for competitive

 Resources or capabilities may help firm to

Is the resource or Implications

 Is the Resource Valuable?

SWOT matrix suggests firms improve performance

 Is the Resource Rare?

 Can the Resource Be Imitated Easily?

Competitors will eventually find a way to copy

 Can the Resource Be Imitated Easily?

 Are Substitutes Readily Available?

 Is the Capability Organizationally Activatable?

You might also like