3 Resource-based view Flashcards
Learning Objective: Perspective of the firm as a bundle of resources 1. Concepts of resource position barriers, resource heterogeneity and imperfect imitability 2. Dynamics of value innovation
What does the resource-based view (RBV) of strategy focus on?
RBV focuses on a company’s internal resources and capabilities as the primary drivers of performance and competitive advantage.
What are the
key types of resources
according to RBV? (3)
- Tangible resources,
- Intangible resources,
- Organizational capabilities. (HR)
What is a tangible resource?
Physical assets such as machinery, buildings, and financial capital.
What are organizational capabilities?
The firm’s ability to utilize its resources effectively to achieve a desired end. (Congruence Modell)
What is an intangible resource? (3)
Non-physical assets such as
- brand reputation,
- intellectual property,
- company culture.
What are the VRI O criteria used to evaluate resources?
Sustainable competitive advantage
➔ Value, Rarity, Imitability, and Organization.
What does the ‘Value’ criterion refer to in the VRIO framework?
A resource is valuable if it helps the firm exploit opportunities or neutralize threats.
What does the
Rarity criterion mean
in the VRIO framework?
A resource is rare if it is not widely possessed by competitors.
What is meant by ‘Imitability’ in the VRIO framework?
A resource is costly to imitate if firms without it cannot obtain or duplicate it easily.
What does ‘Organization’ refer to in the VRIO framework?
The firm must be organized to capture value from its resources.
How does RBV suggest firms sustain a competitive advantage?
(2) 🐥
- By developing and protecting resources
- that are valuable, rare, inimitable, and well-organized.
What is a
core competency
in RBV terms? (3)
A unique capability, ..
- that provides competitive advantage
- is central to the firm’s operations.
Why is resource heterogenity important in RBV? (2)
It implies that, ..
- different firms have different bundles of resources,
- leading to varied levels of performance.
What is resource immobility? (2)
- Resources cannot easily move from one firm to another,
- making them a source of sustained competitive advantage.
How can firms protect their valuable resources according to RBV? (4)
Through mechanisms such as ..
- patents,
- trademarks,
- trade secrets,
- maintaining organizational culture.
Tangible vs Intangible Resources (3x2)
Resources of the Firm
- optimal
- primary / secondary
- value
The optimal growth of a firm involves a balanced exploitation and development of resources
Value Chain & Firm as a Dynamic Strategic Activity System
What must a resource pass to be a source of sustainable competitive advantage according to RBV? (5)🍋
It must pass the tests of, ..
appropriability,
The firm must be able to capture the value that the resource generates.
competitive superiority.
The resource must be superior (besser/ überlegen) to those of the firm’s competitors.
inimitability,
The resource must be difficult for competitors to imitate or replicate.
durability,
The resource must not depreciate quickly over time.
substitutability,
There should be no strategically equivalent substitutes for the resource.
What does successful corporate strategy require according to RBV? (2)
- Leveraging a company’s valuable resources into multiple markets
- where those resources contribute to competitive advantage.
Why should companies invest in upgrading and maintaining their valuable resources?
Because all resources eventually depreciate over time due to competitive forces.
What common mistake do companies make regarding their resources in new contexts?
Companies often overestimate the transferability of specific capabilities to new contexts.
How does RBV complement previous strategy frameworks? (2)
- It integrates with frameworks like industry analysis and positioning
- to explain sources of differences in profitability between firms within an industry.
What does RBV provide a systematic way to do? (3)
To identify, develop, protect, and deploy
- a company’s unique resources and capabilities
- as the foundation for strategy and competitive advantage.
