3.10 Resource based Theory

Also known as resource-based view (RBV)

(Wernerfelt 1984) was the first seminal paper on RBV. Later on, (J. B. Barney, Ketchen, and Wright 2011) argued for RBV to be considered a theory.

3.10.1 Assumptions

  1. Resource heterogeneity assumption

Firms have different bundles of resources (Peteraf and Barney 2003). Hence, firms are skilled at certain activities due to their unique resources.

  1. Resource immobility assumption

Differences in resources can be sustained due to the difficulty in trading resources.

Based on these two assumption, RBT argues that since other firms find these valuable resources too costly or too difficult to imitate, then firms having these resources can have sustainable competitive advantage (SCA) (J. B. Barney and Hesterly 2012)

Since not all resources are drivers of SCA, only resources are “simultaneously valuable, rare, imperfectly imitable, and exploitable by the firm’s organization.” (based on VIRO) (Kozlenkova, Samaha, and Palmatier 2013)

3.10.2 VIRO

Resources refer to “tangible and intangible assets firms use to conceive of and implement its strategies.” (J. Barney and A. Arikan 2001) which consists of:

  • physical
  • financial
  • human
  • organizational

Another categorization of resources includes capabilities, and dynamic capabilities

In marketing strategy, resources that are usually studied are:

  • brand
  • relational
  • knowledge

Marketing uses the RBT to provide rationale to invest in marketing activities that lead to long-term performance.

Market-based resources refer to “a subset of firm resources (assets and capabilities) related to marketing activities, such as building brands, relationships, innovations, or knowledge.” (Kozlenkova, Samaha, and Palmatier 2013).

  • “Resource intangibility Most resources studied in marketing are intangible (e.g., brand and relational assets, knowledge generating capabilities).”
  • “Complementarity means that the benefits from one resource are leveraged by the presence of another.” (Morgan, Slotegraaf, and Vorhies 2009).

When doing research and arguing for a resoruce as VIRO, one should refer to table 3 of (Kozlenkova, Samaha, and Palmatier 2013)

RBT can apply not only to firm-level of analysis, but also exchange-level of analysis.

3.10.2.1 Valuable

Firm resources are valuable if they “enable a firm to develop and implement strategies that have the effect of lowering a firm’s net costs and/or increase a firm’s net revenues beyond what would have been the case” without these resources (J. B. Barney and Arikan 2017)

3.10.2.2 Rare

Only limited firms possess such resource.

3.10.2.3 Imperfectly Imitable

Hard to obtain or develop

If the organization possesses resources that are VIR (Valuation, rare, and imperfectly imitable), it has sustainable competitive advantage

3.10.2.4 Organization

firms must be “organized to exploit the full competitive potential of its resources and capabilities” (J. B. Barney and Hesterly 2012, 94)

References

Barney, J., and & A. Arikan. 2001. “The Resource-Based View: Origins and Implications.” In Handbook of Strategic Management.
Barney, Jay B., and Asli M. Arikan. 2017. “The Resource-Based View.” In The Blackwell Handbook of Strategic Management, 123–82. Blackwell Publishing Ltd. https://doi.org/10.1111/b.9780631218616.2006.00006.x.
Barney, Jay B., and William S. Hesterly. 2012. Strategic Management and Competitive Advantage Concepts.
Barney, Jay B., David J. Ketchen, and Mike Wright. 2011. “The Future of Resource-Based Theory.” Edited by Jay B. Barney, David J. Ketchen, and Mike Wright. Journal of Management 37 (5): 1299–1315. https://doi.org/10.1177/0149206310391805.
Kozlenkova, Irina V., Stephen A. Samaha, and Robert W. Palmatier. 2013. “Resource-Based Theory in Marketing.” Journal of the Academy of Marketing Science 42 (1): 1–21. https://doi.org/10.1007/s11747-013-0336-7.
Morgan, Neil A., Rebecca J. Slotegraaf, and Douglas W. Vorhies. 2009. “Linking Marketing Capabilities with Profit Growth.” International Journal of Research in Marketing 26 (4): 284–93. https://doi.org/10.1016/j.ijresmar.2009.06.005.
Peteraf, Margaret A., and Jay B. Barney. 2003. “Unraveling the Resource-Based Tangle.” Managerial and Decision Economics 24 (4): 309–23. https://doi.org/10.1002/mde.1126.
Wernerfelt, Birger. 1984. “A Resource-Based View of the Firm.” Strategic Management Journal 5 (2): 171–80. https://doi.org/10.1002/smj.4250050207.