Firm resources and sustained competitive advantage Barney J
Firm resources and sustained competitive advantage Barney, J. Journal of Management, 17(1): 99 -120
Research question Firm resource ? Competitive advantages
Purposes • Understanding the sources of sustained competitive advantage • Examines the link between firm resources and sustained competitive advantage – Under what conditions firm resources can a source of sustained competitive advantage for a firm
Assumptions • Firm resources are heterogeneous – Firms do not obtain first mover advantage for identical resources • These resources are not perfectly mobile across firms – Enter barrier and mobility barrier prolong the heterogeneous effect
Sustained competitive advantage • A firm is said to have 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 • Not purchasable on the factor market
Firm resources • Valuable – Resources that improve the efficiency and effectiveness of strategy implementation • Rareness – A small number of competitors • Imperfectly imitable – a) depends on unique historical condition, b) causal ambiguity, and c) socially complex • Non-substitutable – Either similar or different, so long as the purpose is served
Firm Resources and Sustained Competitive Advantage The relationship btw resource heterogeneity and immobility; value, rareness, imitability, and substitutability; and sustained competitive advantage.
Firm resource endowments • Managers are limited by their ability to manipulate all the attributes and characteristics of their firms • This limitation makes some firm resources imperfectly imitable, and thus potential sources of sustained competitive advantage • Competitive advantages cannot be purchased on open markets • Manager’s role is to understand endowment (VRIN resources)
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