Question

Topic: Student Questions

Firm Competitive Advantage: A Resource Based View

Posted by Anonymous on 11/22/2009 at 10:33 AM ET 250 Points
Hi, i'm an undergraduate student studying a module in strategic management and was wondering if you had any thoughts on Resource Based View (JB Barney) (Collins & Montgomery) and how it can be used to analyse a firms competitive advantage - Kindest regards, al
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  • Posted by wnelson on 11/22/2009 at 12:32 PM Accepted
    Al,

    The resource-based view is just one tool in forging a competitive advantage. There are many other tools that can and should be used in conjunction with this one: SWOT, PEST/PESTLE, Porters Five Forces, etc. The biggest weakness of the resource-based model is its internal focus. Firms should focus on the customer first in particular, customers' needs. Without a customer focus, internal resources are at best ineffectively utilized and at worst, wasted.

    However, with respect to competitive analysis, the resource-based view is very useful. Another name for a resource that is unique and long term sustainable is a "core competency." Without a core competency, a firm's presence in the market will be fleeting. Competitors will match the firm's offering to customers by copying the offering or find an alternative offering.

    I hope this helps.

    Wayde
  • Posted by Levon on 11/22/2009 at 1:27 PM Accepted
    I use the SWOT analysis regularly, but have found the PEST analysis to also be of great benefit especially when analyzing market conditions.
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