There is no common definition of strategy or the way how to implement it. However, it is common understanding that the purpose of each business1 is to maximise profit and that this is reached through a competitive advantage a firm might have over its rivals. Therefore, strategy should describe a mean to manage and direct a business in its environment towards a favourable market position which offers a competitive advantage (e.g. Rumelt, 1996; Porter, 1996).
In this sense, “a firm is said to have a sustained competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy.” (Barney, 1991: 102) However, there are different approaches regarding what strategies need to be based upon to achieve that competitive advantage, i.e. what are the sources for a favourable market position and a competitive advantage.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- The Resource-based View
- Criticisms of the Resource-based View
- Conclusions
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper critically reviews the resource-based view (RBV) and its contribution to our understanding of strategy. It examines how the RBV contrasts with the positioning-based view (PBV) and analyzes the criticisms leveled against the RBV.
- The development and application of the Resource-Based View (RBV) in strategic management.
- Comparison and contrast between the RBV and the Positioning-Based View (PBV).
- Analysis of the key criticisms directed towards the RBV.
- The role of firm resources, capabilities, and isolating mechanisms in achieving sustainable competitive advantage.
- The impact of firm history and path dependency on strategic choices.
Zusammenfassung der Kapitel (Chapter Summaries)
Introduction: This introductory chapter sets the stage by defining the core concept of business strategy as a means of achieving a competitive advantage that leads to profit maximization. It establishes the central question of how different approaches, such as the resource-based view (RBV), contribute to understanding and formulating successful strategies. It highlights the lack of a universally accepted definition of strategy, underscoring the need for exploring various perspectives and frameworks in the field of strategic management. The chapter introduces the concept of sustained competitive advantage, which is central to the discussion of resource-based views and is defined as a value-creating strategy that cannot be duplicated by competitors. This lays the foundation for a deeper exploration of the RBV and its implications.
The Resource-based View: This chapter delves into the resource-based view (RBV) of strategic management, presenting it as an alternative to the positioning-based view (PBV). The RBV emphasizes the firm's unique bundle of resources – assets, capabilities, processes, information, etc. – as the foundation for competitive advantage. The chapter explains the two core assumptions of the RBV: resource heterogeneity among firms and imperfect resource mobility. It argues that sustainable competitive advantage stems from controlling valuable, rare, inimitable, and non-substitutable resources. The chapter meticulously contrasts these assumptions with those of the PBV which assumes homogeneity and perfect mobility of resources. It concludes by stressing that the RBV emphasizes exploiting resource differences to achieve and sustain competitive advantage, unlike the PBV's focus on activity and position.
Schlüsselwörter (Keywords)
Resource-based view (RBV), positioning-based view (PBV), competitive advantage, sustainable competitive advantage, strategic resources, firm resources, capabilities, isolating mechanisms, path dependency, resource heterogeneity, imperfect resource mobility.
Frequently Asked Questions: A Comprehensive Language Preview
What is the main topic of this document?
This document provides a comprehensive overview of the Resource-Based View (RBV) in strategic management. It critically reviews the RBV, compares it to the Positioning-Based View (PBV), analyzes criticisms of the RBV, and explores key themes related to achieving sustainable competitive advantage.
What are the key themes explored in this document?
The key themes include the development and application of the RBV, a comparison between the RBV and PBV, analysis of criticisms against the RBV, the role of firm resources and capabilities in achieving sustainable competitive advantage, and the impact of firm history and path dependency on strategic choices.
What are the chapter summaries included in the preview?
The preview includes summaries for the Introduction and The Resource-Based View chapters. The introduction defines business strategy, introduces the concept of sustained competitive advantage, and sets the stage for exploring the RBV. The summary of "The Resource-Based View" chapter details the core assumptions of the RBV (resource heterogeneity and imperfect resource mobility), contrasts it with the PBV, and highlights how sustainable competitive advantage is achieved through valuable, rare, inimitable, and non-substitutable resources.
What is the Resource-Based View (RBV)?
The RBV is a framework in strategic management that emphasizes a firm's unique bundle of resources (assets, capabilities, processes, information) as the foundation for achieving competitive advantage. It contrasts with the Positioning-Based View (PBV), which focuses on market position.
What are the core assumptions of the RBV?
The two core assumptions of the RBV are resource heterogeneity (firms possess different bundles of resources) and imperfect resource mobility (resources cannot be easily copied or transferred between firms).
How does the RBV differ from the Positioning-Based View (PBV)?
The RBV focuses on a firm's internal resources and capabilities as the source of competitive advantage, while the PBV emphasizes external factors such as market position and industry structure.
What are the key criticisms of the RBV?
While not explicitly detailed in the provided summaries, the document indicates that criticisms of the RBV are analyzed. These criticisms are likely to address issues such as the difficulty of identifying and measuring resources, the limitations of the VRIN framework (valuable, rare, inimitable, non-substitutable), and the challenges in achieving and sustaining competitive advantage.
What are the keywords associated with this document?
Key words include Resource-based view (RBV), positioning-based view (PBV), competitive advantage, sustainable competitive advantage, strategic resources, firm resources, capabilities, isolating mechanisms, path dependency, resource heterogeneity, and imperfect resource mobility.
What is the overall purpose of this document?
The document aims to provide a concise and structured overview of the RBV, allowing readers to quickly grasp its core concepts, key arguments, and main criticisms. It serves as a valuable resource for academic study and analysis of strategic management themes.
- Quote paper
- Katja Kirsch (Author), 2004, Critically review how the resource-based view has developed our understanding of strategy, Munich, GRIN Verlag, https://www.grin.com/document/36856