L3: Internal Flashcards
Barney (1991): Competitive advantage
Competitive advantage: when the firm is implementing a value creating strategy not simultaneously being implemented by any competitors.
Sustained competitive advantage is the same + when these competitors are unable to duplicate the benefits of the strategy.
Ressource-Based View
Barney’s RBV framework emphasizes that a firm’s competitive advantage is derived from its unique resources rather than external industry factors.
Sustained competitive advantage
Figure 2: Not all firms have access to the same resources: 1) Ressource heteroginity and 2) Ressource inimitability (not all firms have access to the same resources, and resources are often immobile, meaning they cannot easily be transferred or copied by competitors.)
Therefore focus on VRIN!
VRIN model
Figure 2: Valuable, Rare, Inimitable, and Non-substitutable
Besides this:
Barney notes that maintaining barriers such as causal ambiguity and social complexity is essential to prevent imitation.
Also it is still important to not only focus on the internal company but also adjusts to external changes.
Grant (2018) kap 5: Resources and Capabilities
Resource based view: a conceptualization of the firm as a collection of resources and capabilities that form the strategy and the competitive advantage! (It is not external factors that should form the S)
Resources and capabilities can lead to profits thorugh monopoly rents (market power: wheat market) and Ricardian rents (resource superiority: 125m Mayweather fight)
Grant (2018) kap. 7: Isolating mechanisms and competitive advantage
Isolating Mechanisms (Figure 7.3)
Isolating mechanisms are barriers that prevent rivals from imitating a firm’s competitive advantage. Could be 1) deterrence (lower prices) and preemption (patent) and 2) causal ambiguity (unknowns for competitors)
Competitive advantage can happen by (also see Porters generic strategies):
1) Cost Advantage (lower cost): economies of scale, learning etc.
2) Differentiation advantage (unique product): value chain and cost driver.
Slides: Mental models
An explanation of how something works.
It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things.
The mental model can be changed by cognitive dissonance.
Slides: Assumptions vs. Hypoethesises
Assumption: beliefs that are taken for granted as true
Hypothesises: testable statements (“if … then …”)
Assumptions –> hypothesis –> observations
Slides: Lady Gaga
Grammys, Top of bilboard, fashion icon etc.
The reason: (Usually artists earned money from primarily streams). But now: Live performance, merchandise, image (UNIQUENESS)
