Resource-Based View of Competitive Advantage
How specific would the identification of strategic capabilities need to be to permit them to be managed to achieve competitive advantage? Business strategy is all about competitive advantage. Businesses need strategies in order to ensure that resources are allocated in the most effective way. A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being Implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy.
Thus impotently advantage exists only after efforts to replicate that advantage have failed. It Is for this reason that organizations are focusing on methods and strategies that are difficult to imitate. One of such methods and strategies is organizational learning through which an organization is capable of developing intellectual capital which include human capital, social capital and organizational capabilities is rare and difficult to imitate.
An organization should strive for unique characteristics in order to distinguish themselves from competitors in the eyes of the consumer for a long period of time. Thus, it is the ability to offer superior customer value on an enduring or consistent basis, a situation In which competitors are unable to easily Imitate the firm’s capacity for value creation.
Aqualung and preserving competitive advantage and superior performance are a function of the resources and capableness brought to the competition.
These capabilities, resulting from learning processes implies an improvement in response capacity through a broader understanding of the environment. From the resource-based view of organizations, managers need to consider whether heir organization has strategic capabilities to achieve and sustain competitive advantage. To do so they need to consider how and to what extent it has capabilities which are: Valuable to buyers Rare Non substitutable If such capabilities for competitive advantage do not exist, the managers need to consider if they can be developed.
Competitive advantage could also be based on rare competences: for example, unique skills developed overtime. Three important points refer to the rarity of competences that might provide sustainable competitive advantage and they are: Ease of transferability: Rarity may depend on who owns the competence and how easily transferable it is. For example, the competitive advantage of some professional service organizations is built around the competence of specific individuals. Sustainability: it may be dangerous to assume that competences that are rare will remain so.
If an organization is successful on the basis off unique set of competences, then competitors will seek to imitate or obtain those competences.
So it may be necessary to consider other bases of sustainability. Core rigidities: There is another danger of redundancy. Rare capabilities may be difficult to change and therefore damaging to the organization. Managers may be so wedded to these bases of success that they perceive them as strength of the organization and invent customer values around them. 2.
Do you agree that if it were possible to identify and manage such capabilities they would be imitated?
When a product that has been in development for one year can be copied and brought to market in days, first mover advantage has lost it… Once stigmatize, imitation is now acceptable. In fact, to stay in the game and not fall behind, firms just imitate.
In this article, he describes why imitation is as valuable as innovation, and why imitation can and should be strategically conceived and systematically executed. Strategic agility requires an ability to respond to the innovations and pioneering moves of competitors.
Crucially, such responses must include not only the ability to prevent others from imitating you, but also the ability to imitate others, a capability that companies and business scholars have been neglecting for years. To argue that imitation can be strategic seems almost blasphemous in the current scholarly climate. But I would venture that imitation can be strategic and should be part of the strategic repertoire of any agile firm. Contrary to popular belief, imitation can be unique if it consists of a set of activities that is distinct in its derivative form or combination architecture.
Together with complementary capabilities and other organizational features such as corporate culture, imitation can be a differentiating factor and has the potential to deliver unique value. Not only can imitation be unlike, out It Is, Dates on overwhelming silently evidence, a rare Ana valuable viability. The supporting evidence comes from virtually every discipline. In art, early scholars labeled imitation mechanical and reproductive but eventually developed a more complex and sophisticated view of the phenomenon. 3.
Is the RUB useful? The first point we have seen that was Barneys fundamental concept of the RUB.
From a static point of view, we showed that his concept of Valuable’ and ‘rare’ resources does not fulfill the conditions for acquiring and realizing a competitive advantage. Because firstly, either the investment necessary to build up resources and the emend-side characteristics that ought to evaluate the value of these resources are exogenous to his framework. Secondly, after remunerating all the factors of production, no competitive advantage has been left to a firm whether the firm possesses ‘rare’ resources or not. All of the ‘rare’ resources ought to be of value to their owner.
In contrast, from a dynamic point of view, we could find an implied possibility in his framework that the competitive advantage may come from ‘imperfections in the factors markets’.
Different firms and different owners in these arrest will have different expectations about the future value of those resources, which create this imperfection. Therefore, different perceptions toward resources produce the possibility of a competitive advantage. This indicates that the abilities of the entrepreneur lie in discovering how to generate the real economic value with their resources in ways that others cannot anticipate.
The second point considered was the relationship between resources, capabilities, and the abilities of the entrepreneur. We suggested that the main source of competitive advantage does not fall into the heterogeneity of resources and abilities per SE, but the heterogeneous perceptions of the entrepreneur. The abilities of the entrepreneur enable capabilities to be performed along the entrepreneur’s vision or strategy, capabilities enable resources to begin to be utilized, and the potential for the creation of output arises.
By treating the relationship as such, we concluded that one of the objectives of corporate strategy is the function of a firm to obtain an entrepreneurial rent by exploiting the factor markets disequilibrium through firm-specific capabilities and resources which are erected by the abilities of an entrepreneur And most important entrepreneurial abilities for gaining the competitive advantage is, nothing to say, the firm’s skill or accuracy at perceiving the future value of resources.
Finally, we suggest two ways for creating entrepreneurial rents, entrepreneurial arbitrage and entrepreneurial innovation. We concluded that the entrepreneurial innovation as an innovation to realize a future value system through the new combinations of resources in present time and space, while the arbitrage is merely exploiting the unexploited opportunities in the present existing market.