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MGMT450-W1.3.1-Resources.pptxResources & Capabilities
Jake Miller
Competitive Advantage
How can we tell which resources and capabilities provide an advantage?
Check the time - it might be a good time for a break. Let them think about it over break, then talk in groups for 5 min, and put ideas on the board.
VRIN
Valuable
Rare
Imperfectly Imitable
Non-substitutable
VRIN
Valuable
Rare
Non-substitutable
Imperfectly Imitable
Valuable
Is the resource or capability valuable?
If it’s not, WHO CARES?
A business built on resources that aren’t valuable is not going to be very successful
If you can think of a company built on a resource or capability that isn’t valuable, and it is successful, you’re thinking of the wrong resource!
Water and diamond
Rare
Is the resource or capability rare?
If not, then competitors will achieve parity
Returns will be average
What was rare in the game?
Imperfectly Imitable
Is impossible or very costly to successfully imitate?
If not, competitive advantage will only be temporary
Returns could be above-average for a while
Why Is It Hard To Imitate?
Unique historical conditions
Right place, right time: opportunity to copy is past
Causal ambiguity 因果模糊性
It’s not clear how the capability emerges!
Social complexity
Emerges from complex social phenomena, like personal relationships
Time
Apply – action to result is not clear
Non-substitutable
Are there viable substitutes available?
If so, there will be limits on how much competitive advantage can be achieved
Substitutes usually remove the need for a thing - Uber imitates taxis, but could substitute car ownership
Game: Each resource was non-substitutable, although you had different ways of capturing value.
Air travel has few viable substitutes, based on travel time. That’s why security is a big deal.
The fire, auction commercial: http://www.youtube.com/watch?v=fvjGKZNT1vQ
Analyze Each Resource Individually
Pick a potential resource
Walk through each V - R - I - N in turn
It has to pass each test
