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Vrio

In: Computers and Technology

Submitted By tufc1994
Words 562
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alue. A firms resources and capabilities should add value by allowing the firm to exploit and mitigate its S&W’s. Likewise, adding value as to a firms resources and capabilities will lead to competitive advantage, providing your firm exploits these value added attributes. Taking the example of IP (above) so long as the competition cannot copy your value added or imitate it, your firm will have a Competitive Advantage. But in today’s world sustainable Competitive Advantage is not possible. So yes, a competitor may well innovate something that reduces your value added. For example, in Oct 2001 Apple’s Steve Jobs, launched the iPod, and it could store up to 5000 songs. The MP3 player and its imitators were now, not as valuable.

Rareness. If similar firms control similar valuable resources and capabilities, then they are not rare. The smartphone was rare when introduced by Apple and so it was valuable and rare. Samsung launched the Galaxy, as well as Lenovo and others, it quickly imitated the iPhone, and so the smartphone does not have rarity for either, or any company today. This does not mean that common or similar resources and capabilities are not useful, they may well be if your firm deploys them and exploits them better than the competition. Ryanair and Southwest have valuable aircraft the same as any other flyer, but their Competitive Advantage comes from how they deploy and use these aircraft with no frills operating costs and pay as you go additional resources.

Imitability. Tangible Resources and capabilities that are valuable and rare can often be imitated as we have seen in the examples above, but intangible Resources and Capabilities are more difficult to imitate. Tacit knowledge for example can be very hard to imitate. Management talent and excellent motivational skills may be impossible to imitate. History is also important, take the case of...

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