Resource Based View | SCMT 4653
Summary
TLDRThis video focuses on business strategy with an emphasis on the Resource-Based View (RBV), which explores how firms gain a competitive advantage through internal resources. It explains that resources must be valuable, rare, inimitable, and non-substitutable to provide a sustainable edge. The video discusses tangible and intangible resources, such as supply chain expertise, and how their effective management can lead to differential firm performance. RBV's application to supply chain management is highlighted as a key driver of business success, offering a blend of cost, service, and timeliness advantages.
Takeaways
- đ The Resource-Based View (RBV) is a business strategy framework that emphasizes the importance of internal firm resources and capabilities for achieving competitive advantage.
- đ RBV was developed by scholars like Barney, Petr, and Wernerfelt, and it has evolved to adapt to changes in the business landscape.
- đ RBV focuses on tangible and intangible resources, with tangible resources being physical assets like buildings and equipment, and intangible resources including skills, capabilities, and expertise.
- đ In supply chain management, tangible resources might include distribution centers or fleets of trucks, while intangible resources could involve the know-how to efficiently leverage these assets.
- đĄ Heterogeneity and immobility are key assumptions of RBV, suggesting that resources vary between companies and are not easily transferable, leading to different firm performances.
- đ RBV resources must be valuable, rare, inimitable, and non-substitutable (VRI) to provide a competitive advantage, with the acronym 'VRI' helping to remember these attributes.
- đŒ Supply chain management is highlighted as a strategic resource within the RBV framework, being valuable, rare, inimitable, and non-substitutable.
- đ The ability to efficiently and effectively manage supply chains is identified as a key driver of differential firm performance in the market.
- đ Supply chain management expertise is considered an intangible resource that is not prevalent and cannot be easily moved from one company to another, making it a significant source of competitive advantage.
- đ Companies that excel in supply chain management can offer customers a more valuable bundle of cost, service, and timeliness attributes, setting them apart from competitors.
Q & A
What is the Resource-Based View (RBV) in business strategy?
-The Resource-Based View (RBV) is a business strategy framework that emphasizes the importance of a firm's internal resources and capabilities as the source of competitive advantage, rather than external factors.
Who are some of the scholars that developed the RBV?
-RBV was developed by scholars such as Barney, Peter, and Wernerfelt.
What are the two types of resources that firms rely on according to RBV?
-According to RBV, firms rely on both tangible and intangible resources.
What are tangible resources in the context of supply chain management?
-Tangible resources in supply chain management include physical assets like distribution centers, trucks, and other infrastructure that can be purchased in an open market.
How do intangible resources differ from tangible resources?
-Intangible resources, unlike tangible ones, do not have a physical presence. They include skills, capabilities, know-how, and process expertise that take time to develop and cannot be easily purchased.
What are the key assumptions of the RBV?
-The RBV is based on two key assumptions: heterogeneity, which means resources differ from company to company, and immobility, which means resources cannot easily move from one company to another.
What does it mean for resources to be valuable, rare, inimitable, and non-substitutable in the RBV?
-In the RBV, resources must be valuable if they help reduce costs or increase differentiation. They must be rare, meaning not widely available to competitors. Resources should be inimitable, making them difficult for competitors to copy. Lastly, they should be non-substitutable, meaning they cannot be easily replaced by other resources.
How does supply chain management fit within the RBV framework?
-Supply chain management fits within the RBV framework because it involves the efficient and effective management of resources that are valuable, rare, inimitable, and non-substitutable, leading to competitive advantage.
Why is supply chain management considered a source of competitive advantage?
-Supply chain management is considered a source of competitive advantage because it involves the orchestration of complex processes across different functions and organizations, which is an intangible resource that is difficult to replicate.
How can a firm's supply chain capabilities lead to differential firm performance?
-A firm's supply chain capabilities can lead to differential firm performance by providing a more valuable bundle of cost, service, and timeliness attributes to customers, which is a result of efficiently and effectively managing supply chains.
What is the essence of competitive advantage according to the RBV?
-The essence of competitive advantage according to the RBV is implementing a value-creating strategy that competitors are not using, which provides superior performance relative to other competitors in the same industry.
Outlines
đ Introduction to Resource-Based View (RBV) in Business Strategy
This paragraph introduces the concept of the Resource-Based View (RBV) in business strategy, focusing on how it can explain differential firm performance. RBV, developed by scholars like Barney and Felton, suggests that a firm's competitive advantage comes from its internal resources and capabilities rather than external factors. The theory emphasizes that both tangible (like distribution centers or trucks) and intangible resources (like skills or expertise) are crucial, with the latter being more significant for long-term competitive advantage due to their development time and non-replicability. The paragraph also discusses the attributes that resources must have to provide a competitive edge: they must be valuable, rare, inimitable, and non-substitutable.
đ The Role of Supply Chain Management in Achieving Competitive Advantage
The second paragraph delves into how supply chain management (SCM) fits within the RBV framework and can be a significant source of competitive advantage. It explains that while tangible resources like distribution centers can provide short-term advantages, it's the intangible resources like SCM expertise that are harder to imitate and more valuable in the long run. The paragraph highlights that SCM, with its complex processes and coordination across various boundaries, is an intangible resource that is rare, inimitable, and non-substitutable. Effective SCM can lead to superior performance by providing customers with better cost, service, and timeliness, thus driving differential firm performance in the market.
Mindmap
Keywords
đĄResource-Based View (RBV)
đĄDifferential Firm Performance
đĄTangible Resources
đĄIntangible Resources
đĄHeterogeneity
đĄImmobility
đĄValuable
đĄRare
đĄInimitable
đĄNon-Substitutable
đĄSupply Chain Management
Highlights
Introduction to the resource-based view (RBV) as a business strategy with a focus on supply chain management.
Exploration of the question: What leads to differential firm performance?
Discussion on the two most relevant schools of thought for supply chain: RBV and the positioning approach.
Historical development of RBV by scholars like Barney and Felton.
Core concepts of RBV: Internal firm focus and exploitation of internal resources for competitive advantage.
Definition and importance of tangible resources in a supply chain context.
Definition and importance of intangible resources, such as skills and know-how.
Contrasting tangible and intangible resources with an example from the supply chain.
Key assumptions of RBV: Heterogeneity and immobility of firm resources.
Explanation of how heterogeneity leads to different internal resources and firm performance.
Discussion on the immobility of resources and its impact on competitive advantage.
The VEERAM acronym for remembering the attributes of resources for competitive advantage: valuable, rare, inimitable, and non-substitutable.
How supply chain management fits within the RBV framework as a source of competitive advantage.
The evolution of supply chain management from a functional to an integrated and holistic approach.
The rarity and inimitability of supply chain management expertise as an intangible resource.
The strategic importance of efficiently and effectively managed supply chains for differential firm performance.
Conclusion on the capability to manage supply chains as a driver of market differences.
Transcripts
[Music]
[Applause]
hello today we're going to begin talking
about a business strategy with specific
emphasis on the resource-based view
which is also referred to as rbv in this
lesson we're gonna look again at the
question of what leads to differential
firm performance why does one firm
outperform its competitors what makes
your company more successful than mine
although there are a number of schools
of thought regarding differential firm
performance there are two that I think
are most relevant for supply chain
thought there's the resource-based view
and the positioning approach in this
lesson we're gonna focus on the
resource-based view RB V was developed
by a number of scholars like Barney Petr
and Werner Felton over time it has
continued to evolve and adapt to the
ever-changing corporate landscape
originally RB V was based on a few core
concepts RB V has an internal firm focus
and advocates that competitive advantage
is derived from exploiting internal firm
resources and capabilities rather than
external factors resource based logic
suggests that firms rely on both
tangible and intangible resources that
are assumed to be heterogeneous and
immobile firm resources must also have
certain attributes in order to help
provide competitive advantage those
attributes are valuable rare inimitable
and non substitutable let's look at each
aspect of the RB V conceptual model in a
little more detail resource base logics
suggest that firms rely on both tangible
and intangible resources that are
assumed to be heterogeneous and a mobile
firm resources must also have certain
attributes in order to help provide a
competitive advantage those attributes
are valuable rare inimitable and non
substitutable let's look at each aspect
of the RB V conceptual model in a little
more detail resources can be tangible or
intangible although we all probably have
an intuitive sense of what that means
let's more specifically define these
terms give some examples and talk about
why they are each important tangible
resources refer to physical things that
we can see in touch like land buildings
equipment and capital in a supply chain
context tangible resources might include
a network of distribution centers or a
fleet of trucks these types of resources
can provide an advantage but that
advantage is often short term because
tangible resources can often be
purchased in an open market on the other
hand intangible resources have no
physical presence we cannot see or touch
intangible resources these are things
like skills capabilities know-how or
process expertise intangible resources
take time to develop and they cannot be
easily purchased on the open market let
me contrast tangible and intangible
resources with a supply chain example
any firm can purchase distribution
centers or a fleet of trucks all it
takes is cash to buy those tangible
resources however the know how to
leverage distribution and transportation
capabilities in the most efficient and
effective manner is an intangible
resource that takes time to develop that
type of intellectual expertise is the
main source of competitive advantage the
resource base view is also based on two
key assumptions they are heterogeneity
and in mobility the assumption that
resources are heterogeneous means that
resources differ from company to company
and that firms in the exact same
industry with the exact same external
forces can still have different internal
resources that lead to differential firm
performance for example Apple and
Samsung both compete in the tablet and
smartphone markets and they share the
same industry structure however the
companies have heterogeneous internal
resources that can explain their
performance differentials the assumption
that resources are immobile simply means
that resources cannot easily move from
one company to another in the short
in mobility also means that competitors
cannot quickly replicate their rivals
resources or their strategies for
example many companies would like to
have apples innovation capabilities but
that strategic resource takes a lot of
time and money to develop and it cannot
be quickly duplicated it is a mobile
according to our BV resources must also
have very specific characteristics in
order to create a competitive advantage
the acronym veeram helps me remember
that resources must be valuable rare
inimitable and non substitutable quite
simply resources are valuable if they
help a company reduce costs increase
differentiation or combine cost and
differentiation characteristics in a way
that creates value for customers in a
supply chain context any strategic
resources that help provide time place
form or possession utility and a better
cheaper or faster way are valuable
resources also need to be rare and by
that I mean resources cannot be widely
available to competitors because if
everyone has a resource then it is
impossible for it to drive differential
firm performance and competitive
advantage in our BV language resources
must be in imitable that is they must be
difficult or costly to imitate so
competitors cannot easily copy and
implement your strategic approach
typically supply chain processes with a
lot of different steps across functional
and organizational boundaries are some
of the most difficult intangible
resources to imitate because every step
in the process is unknown to competitors
or it's unclear which steps are most
important either way supply chain
know-how is tough to imitate finally in
addition to being valuable rare and
inimitable resources also need to be non
substitutable that means they cannot be
replaced by other readily available
resources or
a minimum it must be costly for a rival
to find a substitutable resource the
reason that resources need to be
valuable rare in imitable and non
substitutable is so that they can be
used towards competitive advantage
competitive advantage occurs when
companies implement a value creating
strategy the competitors are not using
this can provide superior performance
relative to other competitors in the
exact same industry that is the essence
of competitive advantage and the goal of
our BV logic but what is this high-level
strategic management concept have to be
with supply chain management that's a
fair question to ask quite simply in my
opinion supply chain management is the
ultimate source of competitive advantage
because it fits so well within the rbv
framework if you think about it
structurally supply chains have existed
for centuries we have always sourced raw
materials operationally transform them
into finished goods and logistically
move them to where they were needed when
they were needed
we've always depended on getting the
right products to the right place at the
right time
however it has just been over the past
few decades that we began to think about
supply chain management in an integrated
and holistic manner we are still
discovering all the benefits of
communicating collaborating and
coordinating about basic business
processes across functional corporate
and national boundaries this intricate
and nuanced know-how is definitely an
intangible resource that is valuable it
is rare it is inimitable and it is non
substitutable supply chain management
expertise is not prevalent and you
cannot just move it from one company to
another and yet if you do eventually
crack the code and manage supply chains
well companies can provide their
customers with a much more valuable
bundle of cost service and timeliness
attributes the capability to efficiently
and effectively manage supply chains is
a strategic resource that drives
differential firm performance so what
leads to differential firm performance
it's the capability to efficiently and
effectively manage supply chains as a
strategic resource that drives the
differences we see in the market
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