Question

13. The resource-based view of the firm identifies four criteria that managers can use to evaluate whether particular resources and capabilities are core competencies and can, therefore, provide a basis for sustainable competitive advantage. Are these measures independent or interdependent? Explain. If (some of) the measures are interdependent, what implications does that fact have for managers wanting to create and sustain a competitive advantage?

Answer 1

Explanation:

The resource-based view can also be defined as the structure of VRIO. In this structure we have the four essential criteria, which are:

1. Value,
2. Recognition,
3. Imitability,
4. Organization.

Value represents how easy or how expensive it is to obtain a particular resource on the market.

Rareness represents how limited, or rare, the resource is.

Imitability represents how difficult and complex it is to imitate the resource.

The organization represents whether the resource is supported by an existing agreement and whether the organization has the right to use it effectively.

It is correct to say that these measures are interdependent because each one of them contributes to assist managers in the decision-making process of creating and implementing strategic actions that will help an organization to create and sustain a competitive advantage in the market in which they operate.