BA 591 Longitudinal Strategy Jim Emery

Prof. Mitchell
Summary of Barney !"irm #eource and Sutained $om%etiti&e Ad&antage'
Core Idea / Focus
#eource()aed &ie* +#B,- i ued to e.%lain and e.%lore ource of firm com%etiti&e
ad&antage. S%ecifically/ Barney de&elo% a frame*or0 identifying the factor that can
allo* reource heterogeneity and immo)ility to create utained com%etiti&e ad&antage
1

+ee "igure 1 )elo*-
"igure 1
Strengths
Pro&ide an o&er&ie* of *here thi *or0 fit in relati&e to other trategy model +e.g./
S123 analyi- and addree a fe* 0ey conce%t and aum%tion to com%are and
contrat #B, *ith traditional trategy theory
3*o im%licit aum%tion of traditional theory include4 1- homogeneity among firm
+in term of reource controlled and trategie %urued-/ and 5- high mo)ility of
reource +%reuma)ly ena)ling high imita)ility of trategie-
3he reource()aed &ie* rela.e thee aum%tion
6oe a good 7o) defining the terminology and 0ey conce%t identified in hi frame*or0
+i.e./ all the term in "igure 1 are defined and/ *here a%%ro%riate/ lin0age to e.iting
literature are identified-
8dentifie o%%ortunitie for future reearch to tet the caual relationhi% identified in hi
frame*or09 Barney %ecifically de&elo% : e.am%le of ho* the frame*or0 might )e
a%%lied to firm reource4 1- trategic %lanning +formal and informal-/ 5- information
%roceing ytem +%articularly thoe ytem dee%ly em)edded in the firm formal and
informal deciion(ma0ing %rocee-/ and :- %oiti&e re%utation.
Barney conclude )y eta)lihing ome lin0age )et*een #B, +and hi frame*or0- and
other concern and theorie of economic and trategy +e.g./ ocial *elfare concern/
organi;ation theory and )eha&ior-9 he alo contrat hi frame*or0 *ith the %o%ulation
ecology %er%ecti&e +i.e./ manager do matter in hi frame*or0-.
Open Questions
Barney %a%er i intereting and raie a num)er of %ractical <uetion/ %articularly *ith
re%ect to the iue of im%erfect imita)ility. 8n the %a%er/ Barney aert that in order for
a firm reource to hold the %otential of utained com%etiti&e ad&antage/ it mut ha&e all
four factor identified in the middle )o. of "igure 1 +%%. 1=5-. Barney decri)e three
1
6efined a a firm im%lementing a &alue creating trategy that i not imultaneouly )eing im%lemented )y current
or %otential com%etitor and *hen thee other firm are una)le to du%licate the )enefit of the trategy.
1=>19>5=1? 1
"irm #eource
@eterogeneity
"irm #eource
8mmo)ility
,alue
#arene
8m%erfect 8mita)ility
( @itory 6e%endent
( $aual Am)iguity
( Social $om%le.ity
Su)tituta)ility
Sutained
$om%etiti&e
Ad&antage
BA 591 Longitudinal Strategy Jim Emery
Prof. Mitchell
factor that can contri)ute to im%erfect imita)ility including4 uni<ue hitorical condition/
caual am)iguity/ and ocial com%le.ity. A a %ractical matter/ many e.ecuti&e engaged
in formal trategic %lanning today %end time trying to undertand )et %ractice of other
firm +)oth *ithin and outide of their indutry- that are )elie&ed to contri)ute to
utained com%etiti&e ad&antage. 2ften the %ractical goal of thi acti&ity i to undertand
ho* the %ractice can )e a%%lied +i.e./ imitated to ome e.tent- *ithin the organi;ation
conducting the %lanning. Aet if you )elie&e Barney frame*or0/ you mut conclude that
thoe )et %ractice that truly contri)ute to utained com%etiti&e ad&antage cannot )e
accurately imitated +or e&en fully decri)ed-. 3hi ha e&eral %otential im%lication
including4
For Managers
!)et %ractice' imitation may )e ueful to a&oid falling )ehind com%etitor/ )ut it
*ill %ro)a)ly not %ro&ide a ource of utained ad&antage9 and
undertanding the tangi)le ucce meaure that cutomer a%%ly to the %roduct
of firm *ith utained ad&antage may )e more fruitful in de&elo%ing firm(
%ecific trategie that lead to utained com%etiti&e ad&antage.
For Researchers
im%erfect imita)ility im%lie that am%le i;e of firm reource contri)uting to
utaina)le com%etiti&e ad&antage are li0ely to )e &ery limited +i.e./ 1B-9 and
it may )e intereting to conider the role of )ounded rationality a it may
moderate the need to aume inimita)ility of a reource +e.g./ if *e aume that
manager limit their earch for )et %ractice/ could firm de&elo% utained
com%etiti&e ad&antage im%ly )y continually canning and im%lementing )et
%ractice *hich cannot )e imitated <uic0ly enough )y their com%etitor %erha%
itelf an inimita)le !rate of im%ro&ement' trategy-.
1=>19>5=1? 5