Resource-Based View

Name: Chan Chi Yan-s12098284

Question 1

The resource-based view a model of firm performance that focuses on the resources and capabilities controlled by a firm as sources of competitive advantage to achieve higher organizational performance. According to RBV proponents, it is much more feasible to exploit external opportunities using existing resources in a new way rather than trying to acquire new skills for each different opportunity. RBV claims that sustained competitive advantage is derived from the “resources and capabilities a firm controls that are valuable, rare, imperfectly imitable, and not substitutable” (Barney et al. 2001).

“Resource” is an economic or productive factor required to accomplish an activity, or as means to undertake an enterprise and achieve desired outcome. There are two types of resources, which are tangible and intangible. Tangible assets are physical things, for example land, buildings, machinery, equipment and capital. Intangible assets are everything else that has no physical presence but can still be owned by the company. Brand reputation, trademarks, and arebrelatively difficult for competitors to analyze and imitate

“Capability” is the ability to perform or achieve certain actions or outcomes which drive business performance. It can be used or developed as the combination of processes, tools, skills and behaviors, and organization. It represent ‘subset of resources that enable a firm to take full advantage of other resources the firm controls’. It is the knowledge by which value is added to the products or services in order to meet the customers’ needs which are usually related to functional areas.

 “Core competencies” are capabilities that serve as a source of competitive

advantage for a firm over its rivals’ (Hitt et al. 2015, 84). A company's core competency is not easily replicated by other organizations, whether existing competitors or new entries into its market. It helps to create a sustained competitive advantage for organizations.

b. A certain resource or capability can result in sustainable competitive advantage depends on whether it is valuable, rare, difficult or costly to imitate, and whether the firm is organized to exploit its potential.

Google is a good example. Google has valuable resources. Google is best known for its search engine. The search engine has been Google’s most valuable resource, driving advertisements which accounts for a 96% of Google’s $37.9 billion revenue.

Employees are also one of Google’s valuable resources. Google emphasize on development of employees creative and remain the talents. The result is the creation of many innovative services and tools which brings the high revenue. Google has rare resources and capability. Google has a large portfolio of patented technology. For example, it bought Motorola Mobility for $12.5 billion in 2011. Google is inimitable. It owns a huge number data centers and servers worldwide. Google Search offers an unparalleled way of searching information quickly that is difficult to copy. And the brand reputation is built over a long time and is something that other companies cannot buy from the market. Therefore, Google sustained competitive advantage is achieved through the resources and capability which are inimitable, value and rare.

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