Resource-based Model
Focuses inside the firm

Core competencies Costly to imitate Differences in firms' Resources and capabilities Unique Rare performance due that serve as a source of Form into Nonsubstituable Resources Integrate Capabilities primarily due to competitive advantage Source of/ Capacity for a set of Inputs into firm's Often May lead to resources to perform a production process developed in Measured by product's = Competitive Advantage task or an activity in an specific 1. Physical performance characteristics Creating value integrative manner functional area 2. Intellectual and and by which customers are 4. Reputation assets Human willing to pay Created by 3. Organizational 5. Technological CA not permanently sustainable 6. Financial Therefore must exploit current adv. while Value creating strategy Low cost and/or high Tangible vs Intangible simultaneously form new advantages Superior differentiation Warning: Core Duplication - more difficult for - Value of tangible assets rigidities comprtitors to constrained
Limited life competitive advantage Sustainability of CA affected by

- Historical: A unique and a valuable organizational Step 2; cultural/brand name If satisfy: - Ambigouous cause Valuable Organisation- Social complexity

Exploit opportunity or neutralize threat

- Distinguishes company - Reflect its personality

1. Environmental changes 2. Availability of substitutes 3. Imitability Of core competence

Step 1 Value Chain Analysis -To identify activities(resources & capabilities) that creates value Value-creating activities = cost and/or differentiation advantages
Primary vs Support

understand, imitate, purchase or substitute - use can be Resources + Capabilities = leveraged core competance Activities that cannot create value/at substantial disadvantage Outsource - Increase flexibility Should be evaluated relative to - Mitigate