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Firm Resources and Sustained Competitive Advantage

1. Barney develops a resource-based view (RBV) framework to explain how firm resources and capabilities can provide sustained competitive advantage. The framework identifies factors that allow resource heterogeneity and immobility to create sustained competitive advantage. 2. The paper relaxes traditional strategy assumptions of homogenous firms and high resource mobility. It provides examples of how the RBV framework could be applied, including strategic planning systems, information systems, and positive reputation. 3. While the RBV framework raises practical questions, imperfect imitability implies that few firms will possess truly inimitable resources providing sustained advantage. Managers should understand customer value measures rather than imitate competitors' practices.

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Brandon Barker
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125 views2 pages

Firm Resources and Sustained Competitive Advantage

1. Barney develops a resource-based view (RBV) framework to explain how firm resources and capabilities can provide sustained competitive advantage. The framework identifies factors that allow resource heterogeneity and immobility to create sustained competitive advantage. 2. The paper relaxes traditional strategy assumptions of homogenous firms and high resource mobility. It provides examples of how the RBV framework could be applied, including strategic planning systems, information systems, and positive reputation. 3. While the RBV framework raises practical questions, imperfect imitability implies that few firms will possess truly inimitable resources providing sustained advantage. Managers should understand customer value measures rather than imitate competitors' practices.

Uploaded by

Brandon Barker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BA 591 Longitudinal Strategy Jim Emery

Prof. Mitchell
Summary of Barney !"irm #eource and Sutained $om%etiti&e Ad&antage'
Core Idea / Focus
#eource()aed &ie* +#B,- i ued to e.%lain and e.%lore ource of firm com%etiti&e
ad&antage. S%ecifically/ Barney de&elo% a frame*or0 identifying the factor that can
allo* reource heterogeneity and immo)ility to create utained com%etiti&e ad&antage
1

+ee "igure 1 )elo*-
"igure 1
Strengths
Pro&ide an o&er&ie* of *here thi *or0 fit in relati&e to other trategy model +e.g./
S123 analyi- and addree a fe* 0ey conce%t and aum%tion to com%are and
contrat #B, *ith traditional trategy theory
3*o im%licit aum%tion of traditional theory include4 1- homogeneity among firm
+in term of reource controlled and trategie %urued-/ and 5- high mo)ility of
reource +%reuma)ly ena)ling high imita)ility of trategie-
3he reource()aed &ie* rela.e thee aum%tion
6oe a good 7o) defining the terminology and 0ey conce%t identified in hi frame*or0
+i.e./ all the term in "igure 1 are defined and/ *here a%%ro%riate/ lin0age to e.iting
literature are identified-
8dentifie o%%ortunitie for future reearch to tet the caual relationhi% identified in hi
frame*or09 Barney %ecifically de&elo% : e.am%le of ho* the frame*or0 might )e
a%%lied to firm reource4 1- trategic %lanning +formal and informal-/ 5- information
%roceing ytem +%articularly thoe ytem dee%ly em)edded in the firm formal and
informal deciion(ma0ing %rocee-/ and :- %oiti&e re%utation.
Barney conclude )y eta)lihing ome lin0age )et*een #B, +and hi frame*or0- and
other concern and theorie of economic and trategy +e.g./ ocial *elfare concern/
organi;ation theory and )eha&ior-9 he alo contrat hi frame*or0 *ith the %o%ulation
ecology %er%ecti&e +i.e./ manager do matter in hi frame*or0-.
Open Questions
Barney %a%er i intereting and raie a num)er of %ractical <uetion/ %articularly *ith
re%ect to the iue of im%erfect imita)ility. 8n the %a%er/ Barney aert that in order for
a firm reource to hold the %otential of utained com%etiti&e ad&antage/ it mut ha&e all
four factor identified in the middle )o. of "igure 1 +%%. 1=5-. Barney decri)e three
1
6efined a a firm im%lementing a &alue creating trategy that i not imultaneouly )eing im%lemented )y current
or %otential com%etitor and *hen thee other firm are una)le to du%licate the )enefit of the trategy.
1=>19>5=1? 1
"irm #eource
@eterogeneity
"irm #eource
8mmo)ility
,alue
#arene
8m%erfect 8mita)ility
( @itory 6e%endent
( $aual Am)iguity
( Social $om%le.ity
Su)tituta)ility
Sutained
$om%etiti&e
Ad&antage
BA 591 Longitudinal Strategy Jim Emery
Prof. Mitchell
factor that can contri)ute to im%erfect imita)ility including4 uni<ue hitorical condition/
caual am)iguity/ and ocial com%le.ity. A a %ractical matter/ many e.ecuti&e engaged
in formal trategic %lanning today %end time trying to undertand )et %ractice of other
firm +)oth *ithin and outide of their indutry- that are )elie&ed to contri)ute to
utained com%etiti&e ad&antage. 2ften the %ractical goal of thi acti&ity i to undertand
ho* the %ractice can )e a%%lied +i.e./ imitated to ome e.tent- *ithin the organi;ation
conducting the %lanning. Aet if you )elie&e Barney frame*or0/ you mut conclude that
thoe )et %ractice that truly contri)ute to utained com%etiti&e ad&antage cannot )e
accurately imitated +or e&en fully decri)ed-. 3hi ha e&eral %otential im%lication
including4
For Managers
!)et %ractice' imitation may )e ueful to a&oid falling )ehind com%etitor/ )ut it
*ill %ro)a)ly not %ro&ide a ource of utained ad&antage9 and
undertanding the tangi)le ucce meaure that cutomer a%%ly to the %roduct
of firm *ith utained ad&antage may )e more fruitful in de&elo%ing firm(
%ecific trategie that lead to utained com%etiti&e ad&antage.
For Researchers
im%erfect imita)ility im%lie that am%le i;e of firm reource contri)uting to
utaina)le com%etiti&e ad&antage are li0ely to )e &ery limited +i.e./ 1B-9 and
it may )e intereting to conider the role of )ounded rationality a it may
moderate the need to aume inimita)ility of a reource +e.g./ if *e aume that
manager limit their earch for )et %ractice/ could firm de&elo% utained
com%etiti&e ad&antage im%ly )y continually canning and im%lementing )et
%ractice *hich cannot )e imitated <uic0ly enough )y their com%etitor %erha%
itelf an inimita)le !rate of im%ro&ement' trategy-.
1=>19>5=1? 5

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