Competing on Resources Flashcards
Definition resource based view (RBV)
combines the internal analysis within companies with the external analysis of the industry and the competitive environment
strength of a RBV
it can explain in clear managerial terms why some competitors are more profitable than others, how to put core competence into practice, and how to develop sensible diversification strategies.
Why should you always evaluate resources together?
their value is determined in the interplay with the market forces
What must a resource be for it to qualify as the basis for an effective strategy?
It must be inimitable, durable, appropriate, sustainable, and be competitively superior.
What does a resource need to forestall inimitability?
at least one of the following characteristics: physical uniqueness, path dependency, causal ambiguity, or economic deterrence.
What is path dependency?
Path dependency means that something is scarce because of all that happened along the path taken in their accumulation.
What is causal ambiguity?
Causal ambiguity means that it is impossible to disentangle the valuable resource or figure out how to recreate it.
When does economic deterrence occur?
when a company preempts a competitor by making a sizeable investment in an asset.
Where should corporate strategies strive to put resources?
into all the markets in which the resources contribute to a competitive advantage or compete in new markets that improve the corporate resources.
What is the benefit and drawback of specialized resources?
They might be useful to secure a competitive advantage, but they love value quickly when they have moved away from their original setting since they are so specific. The transferability of assets and capabilities is often overestimated, as well as the ability to compete in highly profitable markets.
