IDENTIFYING ATTRIBUTES OF STRATEGIC

RESOURCES

A resource* is any thing or quality that is useful, tangible or

intangible.
Another characteristic of a resource is that it is semi permanent or
sticky; it adheres to the venture and the entrepreneur.
Resources can be property based or knowledge based. Property-
based resources give the entrepreneur “rights.” If one owns a
machine, one has the right to use it. If one has an exclusive long-
term contract, that contract protects one’s rights. Property-based
resources enable a firm to control its environment. Knowledge-
based resources are more intangible, like talent or skill. These
are protected by their tacit nature. Knowledge-based resources
enable the firm to adapt to a changing environment.
Organizations in general have three types of capabilities:
Basics.
functional capabilities, such as marketing, finance, operations, and research
and development. Firms differ in the content of their capabilities as well as
the strength of their management.
• Dynamic improvement capabilities that enable the organization to change
and be responsive and flexible— the learning and innovation capability. The
concept exists that firms can “learn to learn.” This concept is sometimes
called double-loop learning. Firms with the capability of learning to learn
have less need of specific capabilities because they can adapt on the fly.
• Entrepreneurial capabilities are those that use the firm’s resources and
develop new ones strategically.
 The Basic Process under the RBV
• No two entrepreneurs are alike, and no two new firms are identical.
• Our resource-based theory of entrepreneurship makes sense for the
study of new venture creation because it focuses on the differences
between and among entrepreneurs and includes the founding of their
companies.
• Entrepreneurs are individuals who are unique resources to the new
firm, resources that money cannot buy.
• These entrepreneurs can be different based on their personalities and
characteristics, their skills, knowledge, and experiences, their
Socio demographic backgrounds, their social and business networks, their
motivations, and their vision of the world and business. As such, to
understand a theory of differences ,we must begin with the entrepreneur.
• A. Produce (or acquire) resources and skills
cheaply.
• B. Transform (the resource or skills) into a
product or service.
• C. Deploy and implement (the strategy).
• D. Sell dearly (for more than was paid).
Our resource-based theory holds that
sustainable competitive advantage (SCA) is created when
firms possess and employ resources and capabilities that are:
• 1. valuable because they exploit some environmental
opportunity.
• 2. rare in that there are not enough for all competitors.
• 3. imperfectly imitable (most of the time we will refer to
this as hard to copy) so that
• competitors cannot merely duplicate them.
• 4. non substitutable with other resources.
These four items are known as the VRIN characteristics or indicators of sustained
competitive advantage.
• It is also important to distinguish between competitive advantage and
sustained competitive advantage.
• Competitive advantage occurs when the entrepreneur “is implementing a
value-creating strategy not simultaneously being implemented by any current
or potential competitors.”15 “Value creating” refers to above normal gain or
growth.
• Sustained competitive advantage is competitive advantage with a very
important addition: Current and potential firms are unable to duplicate the
benefits of the strategy. Although SCA cannot be competed away by
duplication, it also cannot last forever. Changes in the environment or industry
structure can make what once was SCA obsolete. Important strategic factors in
one setting may be barriers to change in another, or simply irrelevant.