Resource-Based View of the Firm

What is the resource-based view of the firm

Well, this is a group of theories that proposes that a company is able to establish some form of competitive advantage in the marketplace through using its internal resources in a way that takes advantages of external opportunities

Now, those internal resources need to have certain qualities, and we call this the VRIO acronym of qualities

One, the resources need to be valuable. Two, they need to be rare

That is, rare that the firm has it that others don't. It can't be commonly or easily obtained

Next, not emitable. You can't emulate that value proposition created by these valuable assets or resources simply by

copying it through some other form You can emulate that value proposition well with some other form of resource So you have a valuable resource that not easily obtained and you can imitate it with other types of resources easily And then those resources must be organized

for the efficient and effective capture of value. That is, you need to be able to utilize or implement those resources

in a way that you can deliver and receive back value from customer clients or end users

So the assumption here, the essence here, is that organizations can use their internal resources in a way to exploit opportunities

in the external environment to grab value in a competitive market. And if you can use your resources in this way in accordance with the VRIO framework

then you can establish some form of competitive advantage over others in an otherwise competitive marketplace

So with this being said, the resource-based view of the firm is consistent with an understanding of competitive advantage and competitive strategy in the firm