Class 9: Resource-Based View

Question 1

What are the 5 Characteristics of Strategically Valuable Resources?

Answer 1

Inimitability
Depreciates Slowly
Value is controlled by the company
Not easily substituted
Better than competitor's similar resources

Question 2

What does the RBV see companies as?

Answer 2

Very different collections of physical and intangible assets and capabilities
No two companies are alike because no two companies have had the same set of experiences, acquired the same assets or skills, or built the same organizational cultures

Question 3

How are strategically valuable resources “valuable”?

Answer 3

• Valuable relative to competition, in a specific context

- cannot be evaluated in isolation, bc value is determined in the interplay with market forces

Question 4

What is the test of inimitability?

Answer 4

is the resource hard to copy?

• physically unique- patents etc
• path dependent- takes time
• causal ambiguity- hard to figure out

Question 5

What is the test of durability?

Answer 5

how quickly does the resource depreciate?

-patents are right when they end

Question 6

What is the test of appropriability?

Answer 6

who captures the value that the resource creates?

if you have a company with a “star” sales person, how secure is that resource?

Question 7

What is the test of substitutability?

Answer 7

can a unique resource be trumped by a different resource?

Question 8

What is the test of competitive superiority?

Answer 8

whose resource is really better?

Question 9

What is the big lesson that managers should conclude?

Answer 9

conclusions for critical resources should be based on objective data from the market

Question 10

Ok so so what?

Answer 10

Valuable resources must still be joined with other resources and embedded in a set of activities
after all, a company has core competencies too

Question 11

What are some criticisms of RBV?

Answer 11

• circular logic: rare and value= competitive advantage?
• resource value is rarely constant
• minimal research on how RBV applies to the real world
• Vague definitions: (eg tacit knowledge) are hard to measure
• bit of a black box: (what are the inputs and outputs)