Barney article: Firm Resources and Sustained Competitive advantage

Firm Resources and Sustained Competitive Advantage

Jay Barney
Texas A&M University

TABLE OF CONTENT

I. Introduction
Understanding sources of sustained competitive advantage has become a major area of research in strategic management.

II. Defining key concepts
1) Firm resources
2) Competitive advantage
3) Sustained competitive advantage

III. Competition with Homogeneous and Perfectly Mobile Resources
Examining the role of immobile form resources in creating sustained competitive advantage.
1) Resource Homogeneity and Mobility and Sustained Competitive Advantage
2) Resource Homogeneity and Mobility and First-Mover Advantages
3) Resource Homogeneity and Mobility and Entry/Mobility Barriers

IV. Firm Resources and Sustained Competitive Advantage
Evaluating whether or not particular firm resources can be sources of sustained competitive advantage.
Four empirical indicators of the potential of firm resources to generate sustained competitive advantage:
1) Valuable: exploit opportunities and/or neutralizes threats in a firm's environment
2) Rare among a firm's current and potential competition
3) Imperfectly imitable
a) Unique historical conditions
b) Causally ambiguous
c) Socially complexity
4) Cannot be strategically equivalent substitutes

V. Applying the Framework
Analyzing the potential of several firm resources for generating sustained competitive advantage
Three examples of how this framework can be applied
1) Strategic Planning and Sustained Competitive Advantage
2) Information Processing Systems and Sustained Competitive Advantage
3) Positive Reputations and Sustained Competitive Advantage

VI. Discussion
1) Social Welfare
2) Organization Theory Behavior
3) Firm Endowment

VII. Conclusion
Firms cannot expect to “purchase” sustained competitive advantages on open markets but such advantages can be found in the valuable, rare, imperfectly imitable, and non-substitutable resources already controlled by a firm.