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The resource based view of a firm

Resource Based View of the Firm

RBV can be seen as a reaction against the positioning school and its somewhat prescriptive approach which focused managerial attention on external considerations, notably industry structure. The so-called positioning school had dominated the discipline throughout the 1980s. In contrast, the emergent resource-based view argued that the source of sustainable advantage derives from doing things in a superior manner; by developing superior capabilities and resources.

Jay Barney 's article, "Firm Resources and Sustained Competitive Advantage" 1991is seen as pivotal in the emergence of the resource-based view. Barney stated that for resources to hold potential as sources of sustainable competitive advantage, they should be valuable, rare, imperfectly imitable and not substitutable now generally known as VRIN criteria.

  1. In addition, management must invest in organisational learning to develop, nurture and maintain key resources and competencies.
  2. Resources[ edit ] Barney defines firm resources as.
  3. What this leads to are companies that do not think of themselves in terms of the products that they make, or the services that they provide, but rather as a set of core competences that create global leadership in the sectors they choose to operate within. Jay Barney 's article, "Firm Resources and Sustained Competitive Advantage" 1991 , is seen as pivotal in the emergence of the resource-based view.

BarneyGeorge S. DayGary HamelShelby D. Concept[ edit ] Achieving a sustainable competitive advantage lies at the heart of much of the literature in both strategic management and strategic marketing.

  1. Definitions[ edit ] Given the centrality of resources in terms of conferring competitive advantage, the management and marketing literature carefully defines and classifies resources and capabilities. Not all resources are equal.
  2. In addition, management must invest in organisational learning to develop, nurture and maintain key resources and competencies.
  3. In the resource-based view, strategists select the strategy or competitive position that best exploits the internal resources and capabilities relative to external opportunities. Definitions[ edit ] Given the centrality of resources in terms of conferring competitive advantage, the management and marketing literature carefully defines and classifies resources and capabilities.
  4. Imperfectly imitable - not easily implemented by others.

A key insight arising from the resource-based view is that not all resources are of equal importance, nor possess the potential to become a source of sustainable competitive advantage.

In addition, management must invest in organisational learning to develop, nurture and maintain key resources and competencies. In the resource-based view, strategists select the strategy or competitive position that best exploits the internal resources and capabilities relative to external opportunities. Given that strategic resources represent a complex network of inter-related assets and capabilities, organisations can adopt many possible competitive positions.

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Although scholars debate the precise categories of competitive positions that are used, there is general agreement, within the literature, that the resource-based view is much more flexible than Porter's prescriptive approach to strategy formulation. Rare - not available to other competitors. Imperfectly imitable - not easily implemented by others. Non-substitutable - not able to be replaced by some other non-rare resource.

Definitions[ edit ] Given the centrality of resources in terms of conferring competitive advantage, the management and marketing literature carefully defines and classifies resources and capabilities. Resources[ edit ] Barney defines firm resources as: This comparative advantage enables firms to produce marketing offerings that are either a perceived as having superior value or b can be produced at lower costs. Therefore, a comparative advantage in resources can lead to a competitive advantage in market position.