Mg 495

Please Describe, in detail, how the resource-based overview or attitude for a firm helps explain competitive advantage for that firm.

The Resource-Based overview combines the internal (core competence) and external perspectives on strategy. Like the frameworks of core competence and capabilities, firms have very different collections of physical and intangible assets and capabilities, which the Resource-Based overview calls resources (Wheelen & Hunger, 2012, p. 138). Resource-Based overview helps a firm in utilizing its resources in a way that create the ultimate results in a form of superior value. It means that resources should be superior to competitors.

Firms create competitive advantage by perceiving or discovering new and better ways to compete in an industry and bringing them to market, which is ultimately an act of innovation. Innovations shift competitive advantage when rivals either fail to perceive the new way of competing or are unwilling or unable to respond (Cardenas, n.d). If it would not be superior and unique, the competitors would replicate it easily and the value of the product would be disappeared quickly. Competitive advantage on resource-based works on the principle – "An Opportunity by itself has no real value unless a company has the capacity (i.e. resources) to take advantage of that opportunity (Wheelen & Hunger, 2012, p. 179)".

Competitive advantage is ultimately attributed to the ownership of a valuable resource. Resources are more broadly defined to be tangible (e.g. property rights, capital), intangible (e.g. technology). No two companies have the same resources because no two companies have had the same set of experience, acquired the same assets and skills, or built the same organizational culture. Competitive advantages that are sustainable over time generally arise from the creation of bundles of resources and capabilities (Wright, McMahan, & McWilliams, 1993, pp. 5-6) .

Cardenas, H. (n.d.). Small Business Chron....