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Barney - Film resources and sustained competitive advantage (VRIN)

8 important questions on Barney - Film resources and sustained competitive advantage (VRIN)

What are the 2 assumptions of the RBV in analyzing sources of competitive advantage?

1 Firms within an industry may be heterogeneous with respect to the strategic resources they control
2 These resources may not be perfectly mobile across firms, and thus heterogenity can be long lasting. 
(Porter says the opposite of these assumptions)

Firm resources are strengths that firms can use to conceive of and implement their strategies. Which 3 categories of resources are there?

1 Physical capital resources: physical technology used in a firm, a firms plant (fabriek) and equipment, its geopgraphic location and its acces to raw materials
2 Human capital resources: training, experience, judgment, intelligence, relationships and insights of individual managers and workers.
3 Organizational capital resources: formal reporting structure, (in)formal planning, controlling and coordinating systems

What is sustained competitive advantage?

Value-creating strategy which is not simultaneously implemented by any current or potential competitors and when these other firms ar eunable to duplicate the benefits of this strategy.
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What are the 2 objections (bezwaren) of the defintions of (sustained) competitive advantage?

1 First mover advantages (Lieverman&Montgomery): first firm may gain acces to different kind of resources. But if firms are identical in resources, it's not possible to gain competitive advantage for any firm from first moving
2 Entry/mobility barriers (Bain): if there are strong entry/mobility barriers, these firms may be able to obtain a sustained competitive advantage. But this implies that these firms have certain resources which are heterogeneous and not perfectly mobile.

A firm resource must have four (VRIN) attributes to create a sustained competitive advtange, name those 4:

1 Valuable: it exploits opportunities and/or neutralizes threats and it enables firms to conceive/implement strategies that improves it efficiency and effectiveness.
2 Rare: among a firms current/potential competition
3 Inimitable: firms that do not possess these resources can't obtain them.
4 Non-substitutable: there must be no strategically equivalent

Name 3 reasons for resources for being inimitable:

1 The ability of a firm to obtain a resource is dependent upon unique historical conditions 
2 The advantage is causally ambiguous: when the link between the resources and the sustained competitive advantage isn't (perfectly) understood
3 The resources are socially complex: relation among managers, the firms culture etc.

What two forms of substitutability are there?

1 If it's not possible to imitate the resources exactly, it can be possible to substitute a similar resource that enables the same strategy
2 Very different firm resources can also be strategic substitutes

It is Barney against Porter, why?

Porter: all firms have the same resources: homogenity + mobility of resources (market will correct heterogenity). Barney says that resources are heterogeneous, they can be rare.

The question on the page originate from the summary of the following study material:

Designing effective organizations : how to create structured networks | 9780787960643 | Michael Goold, et al

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