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The Resource Based View

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Submitted By bryster23
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The Resource Based View – Jay Barney
A firm’s competitive advantage lies in its resources. It exams the link between a firms resource ans sustained competitive advantage. To sustain a competitive advantage it requires that these resources heterogeneous and immobile. The key point of the theory is to identify the firm’s resources and see if it is VRIN (Value, Rarity, In-imitable and Non substitutable) and then protect them. Formal planning is highly imitable and thus cannot be a source of sustained competitive advantage.
An argument for heterogeneity is the first mover advantage where the firm may gain access to good distribution channels; develop good reputations before competitors come. Likewise theyre are barriers to entry. How to apply the resource based view:

It resources include all assets, capabilities, organizational processes, firm attributes, information, knowledge etc. controlled by a firm that will help its efficiency. This will be broken down into human, physical and organization resources.
A sustained competitive advantage when it is implementing a value creating strategy not simulteously being implemented by any current or potential competitor and when these other firms are unable to duplicate the benefit of this strategy. Not on calendar time.
* Priem and Butlers critique to 1991 paper states it is tautological (it is true in all possible interpretations). That’s its primary assertions are true by definition, and, thus not subject to empirical tests. Can also be said about Porters assertions between the relationship between industry attractiveness and firm performance can be reduced in tautology by observing that firms in attractive industry’s will outperform firms in unattractive industries and by defining industry attractiveness in terms of the ability for firms to outperform well.

Not only does positioning and argument help define and limit an argument’s contribution, it also goes a long way in determining the structure of that argument and the issues that it will and will not address.

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