Binary Options
Sustainable Competitive Advantage: Extending the Resource Based View
A body of literature has emerged which addresses the content of sustainable competitive advantage as well as its sources and different types of strategies that may be used to achieve it.
A firm is argued to have a competitive advantage when it is implementing a value creating strategy which a current or potential competitor is not implementing at the same time. Moreover, a firm is argued to have a sustained competitive advantage when it is implementing a value creating strategy which a current or potential competitor is not implementing at the same time and when these other firms are unable to duplicate the benefits of this strategy. However, in order for a resource to have the potential of being a sustained competitive advantage, it must contain the following four attributes: Firstly, it must be valuable, in the sense that it exploits opportunities and/or neutralizes threats in a firm’s environment, secondly, it must be rare among firm’s current and potential competition; thirdly, it must be imperfectly imitable and fourthly, there cannot be any strategically equivalent substitutes for this resource that are valuable but neither rare or imperfectly imitable.(Amit,2001)
The resource-based theory is based on the assumption that firms are fundamentally heterogeneous regarding their resources and internal competencies. This debates with the problem of how firms can exploit their internal resource base and capabilities to obtain sustained competitive advantages. The articles also provides a precise distinction between the intrinsic causal ambiguity associated with a particular strategy and the subjective ambiguity perceived by a challenger. (Dollinger,2010) It also indicates that intrinsic ambiguity is a necessary but insufficient condition for a sustained capability-based advantage. These also demonstrate that combinatorial complexity, a phenomenon that has attracted the
A body of literature has emerged which addresses the content of sustainable competitive advantage as well as its sources and different types of strategies that may be used to achieve it.
A firm is argued to have a competitive advantage when it is implementing a value creating strategy which a current or potential competitor is not implementing at the same time. Moreover, a firm is argued to have a sustained competitive advantage when it is implementing a value creating strategy which a current or potential competitor is not implementing at the same time and when these other firms are unable to duplicate the benefits of this strategy. However, in order for a resource to have the potential of being a sustained competitive advantage, it must contain the following four attributes: Firstly, it must be valuable, in the sense that it exploits opportunities and/or neutralizes threats in a firm’s environment, secondly, it must be rare among firm’s current and potential competition; thirdly, it must be imperfectly imitable and fourthly, there cannot be any strategically equivalent substitutes for this resource that are valuable but neither rare or imperfectly imitable.(Amit,2001)
The resource-based theory is based on the assumption that firms are fundamentally heterogeneous regarding their resources and internal competencies. This debates with the problem of how firms can exploit their internal resource base and capabilities to obtain sustained competitive advantages. The articles also provides a precise distinction between the intrinsic causal ambiguity associated with a particular strategy and the subjective ambiguity perceived by a challenger. (Dollinger,2010) It also indicates that intrinsic ambiguity is a necessary but insufficient condition for a sustained capability-based advantage. These also demonstrate that combinatorial complexity, a phenomenon that has attracted the
References: Amit, R. S. P. J., 1993. Strategic assets and organizational rent. s.l.:Strategic management journal. Anon., 2010. Dollinger, M. J., Li, X., & Mooney, C. H. Management and Organization Review. Barney, J. B. &. H. M. H., n.d. Trustworthiness as a source of competitive advantage. s.l.:s.n. B, W., 1984. A resource-based view of the firm. Strategic management journal, pp. 5(2), 171-180. Ireland, R. D. &. H. M. A., 1999. Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. The Academy of Management Executive, pp. 13(1), 43-57. Turkmen, H., n.d. Scientific review of the relational view theory and its contribution to critical sourcing decision-making. s.l.:s.n.