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How Does the Resource-Based View (Barney, 1986, 1991; Peteraf, 1993) Explain Differences in Performance Among Firms

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1. How does the resource-based view (Barney, 1986, 1991; Peteraf, 1993) explain differences in performance among firms?
The resource-based view, abbreviated RBV, is a school in which a firm’s strategy is taken into account from the point of a firm’s resources and capabilities. Compared to other theorists on strategy, for example Porter, who focus is on the environment of the firm, the RBV emphasizes on the impact of idiosyncratic attributes of the firm on its competitive position (Barney, 1991). Barney (1986) introduced the term of strategic factor markets in order to analyze the cost of strategy implementation and obtainable returns. Whenever a firm wants to acquire any resources, a strategic factor market arises. For instance, a company acquires a firm and pays for certain opportunity costs an amount of capital. This decision could either have a more positive, negative or an expected effect related to the strategy implementation cost and these differences have to be explained. Positive effect, i.e. competitive advantage, can be gained only if a market is not considered to be perfectly competitive, but heterogeneous. Therefore, a company should use a framework to help firms anticipate the imperfections in these markets. Firms can be responsive in two ways: first, firms aiming to achieve above normal returns from implementing market strategy have to be better informed concerning the future value of those strategies, i.e. have more accurate expectations than other firms acting in the same strategic factor markets. Second, firms have to analyze its’ competitive environment and its unique skills and capabilities. However, the environmental analysis contribute less in a better understanding compared to competitors, since the information is public and thus it can be expected that the competitor has the same knowledge. Also, it’s important to mention the luck factor -

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