Ten Truths About Competitive Advantage Jay B. Barney Professor and Chase Chair Fisher College The Ohio State University
Central Principles of the Resource-based View Firms are bundles of resources and capabilities Resources and capabilities that are valuable, rare, and costly to imitate can be sources of sustained competitive advantage
The VRIO Framework Is a resource. . . Costly to Competitive Valuable Rare Imitate Organized Implications No No --Disadvantage Yes No -Parity Yes -Temp Advantage Yes Yes Sus Advantage Yes
Truth One The attractiveness of an industry cannot be evaluated independent of the resources and capabilities a firm brings to an industry. Southwest; Wal Mart; Crown, Cork and Seal; Nucor Steel
Truth Two Competitive advantage is every employee’s responsibility. Janitor at a Nissan plant, secretary at Koch
Truth Three Doing just as well as the competition ensures mediocrity.
Truth Four Product features are almost never sources of sustained competitive advantage; capabilities needed to create products can be. Sony Corporation
Truth Five It is usually better to be an excellent you then a mediocre them. Competing with Cat, Competing with HP
Truth Six If it is harder for them and easier for you, it is likely to be a source of sustained competitive advantage. The Mailbox, Inc.
Truth Seven Trust, friendship, and teamwork—this is the stuff of sustained competitive advantage.
Truth Eight Firms with valuable, rare, and costly to imitate capabilities can screw up their organization and still make money—don’t learn from them. Xerox
Truth Nine Firms with valuable capabilities that are neither rare or costly to imitate must rely on their organization to make them distinctive. Farmers
Truth Ten If a conflict exists between your capabilities and your organization, change your organization. The skill to change, the will to change