competing on resources
inimitability test
** not last forever - physical uniqueness - path dependency - causal ambiguity - economic deterrence ** potentially prolong firm's ability to make profit
test of competitive superiority
- core competence shouldn't be an internal assessment - but harsh external assessment of what it does better than other rivals - "distinctive competence" - conclusions should be driven from objective data
intangible asset
- could play important role in competitive advantage (or disadvantage) and firm value - not consumed in usage - possible to grow with use/provide valuable base for diversified expansion
Resource based view
- each firm owns unique bundle of resources - these resources can't be accumulated instantaneously - firm's choice of strategy is constrained by its current resource stock and the speed at which it can acquire or accumulate new resources
Tangible asset
- easiest to value/often only resource on the Balance sheet - could be essential - source of competitive advantage due to its standard nature
organizational capabilities
- not factor inputs like tangible and intangible assets - complex combination of assets/people/processes used to transform inputs -> output - govern the efficiency of the firm's activities when applied to the firm's physical production technology - potential source of competitive advantage
Why valuable? (qualifications)
1. inimitability 2. undecaying (or slowly) 3. you(r company) owns the control 4. can't be easily substituted 5. superior to similar resources of your rivals
Resources
3 classification: tangible + intangible + organizational capabilities
Resource based strategy (how to develop?)
Invest in them - continuity + adaptability - commitment + flexibility Upgrade them - improve quality - add complementary resources - develop new resources - enter new industries with them Leverage them - leverage underutilized resources into other segments or industries where they may create value - do it CAREFULLY and do not overextend
substitutability test
can it be trumped by other resources?
test of durability
how quickly does it deteriorate?
test of appropriability
who captures the value of the resource? - value subject to bargaining - need to own the control