![]() If organizations would have the same amount and mix of resources, they could not employ different strategies to outcompete each other. ![]() The first assumption is that skills, capabilities and other resources that organizations possess differ from one company to another. The two critical assumptions of RBV are that resources must also be heterogeneous and immobile. Intangible resources usually stay within a company and are the main source of sustainable competitive advantage. Unlike physical resources, brand reputation is built over a long time and is something that other companies cannot buy from the market. Brand reputation, trademarks, intellectual property are all intangible assets. Intangible assets are everything else that has no physical presence but can still be owned by the company. Physical resources can easily be bought in the market so they confer little advantage to the companies in the long run because rivals can soon acquire the identical assets. Land, buildings, machinery, equipment and capital – all these assets are tangible. There are two types of resources: tangible and intangible. In RBV model, resources are given the major role in helping companies to achieve higher organizational performance. The following model explains RBV and emphasizes the key points of it.Īccording to RBV proponents, it is much more feasible to exploit external opportunities using existing resources in a new way rather than trying to acquire new skills for each different opportunity. ![]() The supporters of this view argue that organizations should look inside the company to find the sources of competitive advantage instead of looking at competitive environment for it. (“Firm resources and sustained competitive advantage”) and others. (“The Resource-Based View of the Firm”), Prahalad and Hamel (“The Core Competence of The Corporation”), Barney, J. RBV is an approach to achieving competitive advantage that emerged in 1980s and 1990s, after the major works published by Wernerfelt, B. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain competitive advantage. The resource-based view (RBV) is a model that sees resources as key to superior firm performance.
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