Resource Base View Strategy
Case study: MTN Introduction: The resource-based view of strategy
According to Segal-Horn (2004 p 163) the Resource-Based View (RBV): “ ... places the firm rather than the industry at the centre of strategy formulation ... It has an internal resource focus rather than an external industry or market focus for strategic thinking.“
Why RBV? Rumelt’s research (Unit 3 Section 2 pp 8-9), although contested, showed that the industry environment accounted for a very small percentage of the different levels of performance between firms, especially in more turbulent industries. The framework developed by Grant (2008 p157) is employed to establish the RBV for MTN:
MTN’s Vision statement
MTN’s vision, as stated on its website (www.mtn.co.za), is:
“ ... to be the emerging markets’ leading telecommunications provider.” The vision statement is followed by MTN’s description of its strategy in which can be seen some of its own view of its resources and capabilities: “Our strategy is built on three pillars: consolidation and diversification; leveraging our footprint and intellectual capacity; and convergence and operational evolution.”
Identifying MTN’s resources
The application of Grant’s model (2008, p131) to identify MTN’s resources is summarised in the figure below:
Exploring the linkages between MTN’s resources and capabilities
In the case of the mobile telephone industry in South Africa and Africa all the competing firms have access to these resources or can acquire them without difficulty. Therefore it follows that if firms compete in the same arena using the same resources, something else must account for the difference in performance. This “something else” is the firm’s capability to combine the resources in such a way that the outcome is a competitive advantage for the firm. By way of analogy: it is the master chef’s recipe and expertise that turns mere ingredients (resources) into mouth-watering gourmet dishes.
Grant as quoted in
According to Segal-Horn (2004 p 163) the Resource-Based View (RBV): “ ... places the firm rather than the industry at the centre of strategy formulation ... It has an internal resource focus rather than an external industry or market focus for strategic thinking.“
Why RBV? Rumelt’s research (Unit 3 Section 2 pp 8-9), although contested, showed that the industry environment accounted for a very small percentage of the different levels of performance between firms, especially in more turbulent industries. The framework developed by Grant (2008 p157) is employed to establish the RBV for MTN:
MTN’s Vision statement
MTN’s vision, as stated on its website (www.mtn.co.za), is:
“ ... to be the emerging markets’ leading telecommunications provider.” The vision statement is followed by MTN’s description of its strategy in which can be seen some of its own view of its resources and capabilities: “Our strategy is built on three pillars: consolidation and diversification; leveraging our footprint and intellectual capacity; and convergence and operational evolution.”
Identifying MTN’s resources
The application of Grant’s model (2008, p131) to identify MTN’s resources is summarised in the figure below:
Exploring the linkages between MTN’s resources and capabilities
In the case of the mobile telephone industry in South Africa and Africa all the competing firms have access to these resources or can acquire them without difficulty. Therefore it follows that if firms compete in the same arena using the same resources, something else must account for the difference in performance. This “something else” is the firm’s capability to combine the resources in such a way that the outcome is a competitive advantage for the firm. By way of analogy: it is the master chef’s recipe and expertise that turns mere ingredients (resources) into mouth-watering gourmet dishes.
Grant as quoted in