Firm Resources & Sustained

Competitive Advantage
Sifat-E-Sattar
ID : 3-14-27-062

Key Concepts
Firm Resources- All the assets, capabilities,
attributes and knowledge that increases
firms efficiency and effectiveness.
Competitive Advantage- A value creating
strategy that is not present in competitors.
Sustained
Competitive
AdvantageThe
competitive advantage that will not be
nullified by duplication efforts.

Models of Competitive

Advantage

Competitive advantage is must for

the firms in order to survive in the
market for a longer period
There are several analysis models to
explore the competitive advantage
Two major analyses- Internal Analysis
and External Analysis
Internal Analysis deals with Strength
& Weakness thus also known as
Resource Based Model.
External Analysis deals with Threats
and Opportunities thus also known as
Environmental Model.

Difference Between Resource

Based Model & Environmental
Model
Assumptions of Environmental ModelI. Firms within an industry of have
identical resources
II. Resources are highly mobile, short
lived heterogeneity
. According to Resource Based ModelI. Firms may have different strategic
resources
II. Resources are not highly mobile, so
long lasting heterogeneity

Resource Homogeneity, Heterogeneity

& Mobility
Which should be maintainedHomogeneity or Heterogeneity?
Mobility or Immobility?
To get the answers, we need to
analyze three situations:
I. Resource Homogeneity & Mobility &
Sustained Competitive Advantage
II. Resource Homogeneity & Mobility &
First Mover Advantage
III. Resource Homogeneity & Mobility &
Entry/Mobility Barriers

Firm Resources & Sustained

Competitive Advantage
Heterogeneity and Immobility is must
Main conditions of Sustained Competitive
Advantage are:

Resources must be valuable

Resources must be rare- uniqueness is

great source of competitive advantage

It must be imperfectly imitable :

-Unique Historical Conditions
-Casual Ambiguity
-Social Complexity

There can not be strategically equivalent

substitutes :
- Similar resources can be substitute
- Different firm resources can also act as

Applying the Framework

Strategic Planning and
Sustained Competitive
Advantage
Information Processing
System and Sustained
Competitive Advantage
Positive Reputations and
Sustained Competitive