Two Critical Assumptions
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The two assumptions - that firms may control - are critical in explaining
superior firm performance for the resource-based model:
1. resource heterogeneity
2. resource immobility
Take-Away Concepts 3
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Resource Heterogeneity:
1. Bundles of resources, capabilities, & competencies differ across firms.
2. The resource bundles of firms competing in the same industry are unique
and thus differ from one another
, Resource Immobility:
1. Resources tend to be "sticky" and don't move easily from firm to firm.
2. Because of this stickiness, the resource differences are difficult to
replicate and, can be long-lasting
How to Sustain a Competitive Advantage
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1. Better Expectation of Future Values: buy resources at a low cost
2. Path Dependence: current alternatives are limited by past decisions
3. Casual Ambiguity: causes of success or failure is not apparent
4. Social Complexity: two or more systems interact creating many
possibilities
Support Activities
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Firm ACTIVITIES THAT ADD VALUE INDIRECTLY, but are necessary to
sustain primary activities
(Diagram) Looking Inside the Firm for Competitive Advantage
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inner circle: looking inside the firm - resources, capabilities, core
competencies, and activities
2nd circle: strategic group
3rd circle: industry
Give this one a try later!
The two assumptions - that firms may control - are critical in explaining
superior firm performance for the resource-based model:
1. resource heterogeneity
2. resource immobility
Take-Away Concepts 3
Give this one a try later!
Resource Heterogeneity:
1. Bundles of resources, capabilities, & competencies differ across firms.
2. The resource bundles of firms competing in the same industry are unique
and thus differ from one another
, Resource Immobility:
1. Resources tend to be "sticky" and don't move easily from firm to firm.
2. Because of this stickiness, the resource differences are difficult to
replicate and, can be long-lasting
How to Sustain a Competitive Advantage
Give this one a try later!
1. Better Expectation of Future Values: buy resources at a low cost
2. Path Dependence: current alternatives are limited by past decisions
3. Casual Ambiguity: causes of success or failure is not apparent
4. Social Complexity: two or more systems interact creating many
possibilities
Support Activities
Give this one a try later!
Firm ACTIVITIES THAT ADD VALUE INDIRECTLY, but are necessary to
sustain primary activities
(Diagram) Looking Inside the Firm for Competitive Advantage
Give this one a try later!
inner circle: looking inside the firm - resources, capabilities, core
competencies, and activities
2nd circle: strategic group
3rd circle: industry
