Resource Based View Concept, Resource Based View

Resource Based View

1. FIRM RESOURCES AND SUSTAINED COMPETITIVE ADVANTAGE - Jay B. Barney Presented to: Dr. Shabana Naveed Presented by: Maria Khalid Subject: Theories in Management Sciences Dated: 5-10-2025

2. "Before we dive into the article, let me briefly introduce the author. Jay B. Barney is one of the most influential scholars in strategic management. He is best known as the founding figure of the Resource-Based View, or RBV. His 1991 paper on ‘Firm Resources and Sustained Competitive Advantage ’ is considered a landmark that shaped modern strategy research ."

3. Table of Contents INTRODUCTION AND BACKGROUND DEFIINING KEY CONCEPTS COMPETITION WITH HOMOGENEOUS AND PERFECTLY MOBILE RESOURCES FIRM RESOURCES AND SUSTAINED COMPETITIVE ADVANTAGE (VRIN FRAMEWORK) APPLICATION OF THE FRAMEWORK DISCUSSION AND IMPLICATIONS CONCLUSION

4. Introduction and Background 01

5. 1960 –SWOT Model Since 1960s, most strategic thinking was built around one main organizing framework known as SWOT model “Firms should use their internal strengths to exploit external opportunities while avoiding threats and fixing weaknesses.”

6. 1970-1980 – Porter’s Five Forces Model E mphasized that the external environment as the main driver of firm success. Porter’s Five Forces Model ( 1980) described how five external forces shape industry attractiveness and, therefore, profitability. Rivalry among competitors, Threat of new entrants, Threat of substitutes, Bargaining power of suppliers, and Bargaining power of buyers

7. 1980-1991 - Wernerfelt (1984 ) , Rumelt (1984) and Barney (1991) - Resource-Based View (RBV ) Firms gain a sustained competitive advantage not just because they are in the right industry, but because they possess unique internal resources and capabilitie s that others cannot easily copy. Resources: Specialized knowledge or technology, Strong brand reputation, Efficient processes, Unique organizational culture, Skilled management etc.

8. Traditional Vs R e source Based View

9. Assumptions of Porter and RBV

10. Definning Key Concepts 1. Firm Resources 2. Competitive advantage 3. Sustained Competitive advantage

11. Firm Resources Def: All assets, capabilities, organizational processes, information, and knowledge controlled by a firm that enables it to design and implement strategies improving efficiency and effectiveness. View in Strategic Management : Firm resources represent the internal strengths a company uses to develop and execute its strategies . Categories: 1 . Physical Capital Resources: Technology, plant, equipment, geographic location, access to raw materials. 2. Human Capital Resources: Training, experience, intelligence, judgment, relationships, and insights of employees and managers. 3. Organizational Capital Resources: Reporting structures, planning and control systems, and informal networks inside and outside the firm. Strategic Relevance: Not all resources provide advantage — only those that help the firm conceive and implement valuable strategies . Irrelevant or Harmful Resources: Some resources may have no impact, or may even harm efficiency and effectiveness.

12. Competitive and Sustained Competitive advantage

13. Competition with homogeneous and perfectly mobile resources Resource Homogeneity and Mobility First-Mover Advantage Entry and Mobility Barriers Sustained Competitive Advantage (SCA ) IMPOSSIBLE

14. Firm resources and Sustained C ompetitive A dvantage V=Valuable VRIN Frame Work R= Rare I= Imperfectly Imitable N= Non-Substitutable

15. Imperfectly Imitable Resources Unique Historical Conditions Causal Ambiguity Social Complexity

16. APPLYING THE FRAMEWORK

17. —Barney asked “ Does this resource meet the VRIN criteria — and therefore, can it be a source of sustained competitive advantage ? ”

18. Apply VRIN to evaluate specific firm resources He examines three examples : Strategic Planning Information Processing Systems Positive Reputation

19. 1. Strategic Planning and Sustained Competitive Advantage Formal planning → Valuable but common → No SCA. Informal/emergent processes → Rare, complex, hard to imitate → Possible SCA.

20. 2. Information Processing Systems and Sustained Competitive Advantage Machines alone → Imitable, no SCA . Embedded manager–machine systems → Rare + complex → Possible SCA.

21. 3. Positive Reputation and Sustained Competitive Advantage Reputation built on trust + history → Valuable, rare, complex → Strong SCA potential. Contracts/guarantees may partly substitute but are not equivalent to genuine reputation

22. Discussion and Implications 1.Strategic management research, 2.Social welfare and economics, 3.Organizational theory and behavior 4.Role managers and firm resource endowment

23. Sustained competitive advantage comes from within/ from resources that are valuable, rare, inimitable, and non-substitutable . Barney’s Resource-Based View reminds us that lasting success isn’t bought; it’s built through unique internal strengths . Firms win not by where they compete, but by what they uniquely possess and how well they use it. Conclusion

24. Thanks! Do you have any questions?