Resource-Based View in Organizations

Learning Objectives

• Firms need to understand their internal organization to succeed
• Value is important for achieving goals
• Tangible resources (financial, physical, technological, organizational) differ from intangible resources (human, reputational, company culture)
• Capabilities are crucial for deploying resources effectively
• Analyzing the firm's value chain helps determine value creation through resources, capabilities, and core competencies
• Outsourcing can concentrate on core activities

Introduction

• Companies may succeed or fail based on internal factors, not only the external environment
• The slides present examples of businesses in the mobile phone industry

Resource-Based View (RBV)

• RBV is a management tool to evaluate a company's assets, using the idea that effective asset use builds competitive advantage and superior performance.
• RBV emphasizes the importance of unique resources and capabilities for competitive advantages.

Analyzing the Internal Organization

• Internal analysis evaluates a company's assets to secure a competitive advantage
• This includes resources, capabilities, and core competencies using tools such as VRIO framework and value chain process

Resources

• Resources are the firm's assets critical for daily operations and achieving goals
• Resources categorized as tangible (financial, physical, technological, organizational) and intangible (human, reputational, and company culture)

Capabilities

• Refers to a firm's ability to use resources to achieve a specific purpose
• Capabilities matter as much or more than resources themselves

Core Competencies

• These are vital resources and capabilities that distinguish a firm in the market
• Core competencies are fundamental for a company's long-term success; examples given include innovation, production methods, technology, and location

VRIO Framework

• Used to assess if a resource/capability is a source of competitive advantage, based on four criteria (valuable, rare, inimitable, organized)
• A capability audit is another framework that focuses purely on company capabilities

Value Chain Analysis

• Developed by Michael Porter, the value chain is a series of activities to create and deliver products to the customer
• It breaks down these activities into primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) and support activities (firm infrastructure, technological development, human resource management, procurement)
• Value is generated when a product or service provides utility to clients, leading to added economic value for the organization.

Outsourcing

• A common business practice where companies delegate certain activities to external service providers
• Companies who outsource may focus on core value-creation activities

SWOT Analysis

• A tool used by companies in strategizing, evaluating strengths, weaknesses, opportunities, and threats in their business environment.