effectiveness and efficiency),
rarity (rare and in high demand),
inimitability (difficult to imitate)
and substitutability (not readily
substituted).
Likewise
the
competency-
based view identifies
an organization’s
competencies as the
foundation for strategy
development.
Intangible Resources include
brand names, company reputation,
organizational morale,
technical
knowledge,
patents and
trademarks and
accumulated
experience
within the
organization.
Such are
very critical
in creating a
competitive edge.
The resource based
perspectives distinguishes
firms in terms of their strategic and
resource endowments and stresses
the uniqueness of every firm. This
approach assumes that a firm can use
superior resources and capabilities to
modify the industry structure and or
change the rules of the competitive
game (Wernerfelt, 1984; Peteraf,
1993). Day (1994) defines
Organizational capabilities as
a complex bundle of skills and
collective learning, exercised through
organizational processes that ensure
superior coordination of functional
activities. Capabilities are about the
firm’s ability to integrate different
tangible and intangible resources in
order to provide product or services
to customers that are valued.
According to Stalk, Evans and
Shulman (1992) the key to success is
no longer where a company chooses
to compete but how the firm’s unique
resources and capabilities dictate
strategy and lead to success. Practical application of the RBV
model in internal environment
analysis involves the following:
RBV starts with delineation of three
basic types of resources; Tangible
Resources, Intangible Resour5ces,
and Organizational capabilities.
Tangible Resources are often found
in the firm’s balance sheet and they
include production facilities, raw
materials, financial resources, real estate,
and computers. These are the physical
and financial assets that a firm uses to
provide value to its customers.
Disaggregate resources: Define the
various resources that a firm possesses
and break them down into specific
broad categorizations. For example
marketing skills can be divided into
advertising which in turn can be
subdivided into national advertising,
local promotions and coupons and
this allows for a more measurable
assessment.
Utilize a functional perspective:
Looking at different functional areas
of a firm disintegrating tangible and
intangible resource as well as the
organizational capabilities that are
present to uncover important value
building resources and activities