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Positioning

In: Business and Management

Submitted By wndud9312
Words 297
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words, Capability-based theory illustrates that a firm can attain competitive advantage through characteristic capabilities derived by the firm (Grant. Et al, 1991). Furthermore, the company should perpetually re-invest to sustain and expand existing capabilities so as to obstruct imitability (Mahoney, 1995). Similarly, the Competing on Capabilities review by Stalk, et al (1992) sets transforming goals to identify and develop the hard-to-imitate organisational capabilities that differentiate the company from its competitors in the eyes of customers. It is clear that this article is predominately align with the RBV.

Essentially, Grant (1991) illustrates capability as simply a firm’s ability to bunch together a team of resources to drive efficiencies in a process, which are in turn, hardly easy for competitors to imitate. Therefore, the RBV highlight that a firm’s competitive advantage is a matter of their capabilities and internal resources in contrast with their position in external environment (Barney, 1995).

Regarding as sustainability aspect, capability-based review significantly contributes to Porter’s framework and RBV. Both perspectives are similar in that a firm’s ultimate goal is to attain sustainable competitive advantage. However, Porter’s five forces model (1980) illustrates that competitive advantage is sustained when it distributes above-average returns in the long run, whereas RBV suggests competitive advantage is sustained when competitors end in failure to render the competitive advantage redundant (Barney, 1991; Rumelt, 1984). In other words, a given strategy will make sustainable performance differential as long as the resources used to design and implement it are non-imitable and non-substitutable, valuable, and rare (Barney, 1991). Wal-Mart achieved above-average returns, implementing of their unique ‘cross-docking system (Stalk. et al,

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