3.3 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.
Related to the market-based assets framework (Srivastava, Shervani, and Fahey 1998)
- 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.
- 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)
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:
Another categorization of resources includes capabilities, and dynamic capabilities
In marketing strategy, resources that are usually studied are:
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 resource 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.
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)
Only limited firms possess such resource.
184.108.40.206 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
firms must be “organized to exploit the full competitive potential of its resources and capabilities” (J. B. Barney and Hesterly 2012, 94)