Week 3

Question 1

What is the Resource Based View (RBV)?

Answer 1

Theoretical framework for understanding how competitive advantage within firms is achieved, and how it is sustained over time

Question 2

What is the benefit of using RBV?

Answer 2

Allows us to explain performance differentials between firms in the same industry, e.g, Unequal distribution of resources across firms

Question 3

What are the two types of resources with examples for both?

Answer 3

Tangible- machinery, plant, factories
Intangible- Brands and IP

Question 4

What does VRIO stand for and what does this framework explore?

Answer 4

Valuable
Rare
Imitable
Organisation

It explores how unique a firm’s resources are

Question 5

What are the issues with VRIO?

Answer 5

VRIO analysis must be constantly updated to deal with the changing business environment

Over time, sources of competitive advantage may become irrelevant or disadvantageous due to changes in, for example, PESTLE conditions

Question 6

What are some sources of competitive advantage that could go under the radar?

Answer 6

High quality managerial decision making

Politically astute

Quick to adapt to change (internal or external)

Question 7

What are the steps of Grant’s strategic importance framework?

Answer 7

Establishing Competitive Advantage
Sustaining Competitive Advantage
Appropriating Competitive Advantage

Question 8

What are the drawbacks of the resource based view?

Answer 8

VRIO neither necessary nor sufficient for sustaining competitive advantage

Value of resources is indeterminate

Definition of resource is unworkable

Question 9

What is dynamic capabilities?

Answer 9

Firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments

Question 10

What are the stages of dynamic capabilities?

Answer 10

1- Sensing opportunities and threats
2- Seizing opportunities
3- Managing competitiveness