How does the resource-based view approach the analysis of a firm's competitive advantage?

How does the resource-based view approach the analysis of a firm's competitive advantage?

• A. By emphasizing market trends
• B. By focusing on internal resources and capabilities
• C. By assessing external political influences
• D. By prioritizing customer satisfaction above all

Answer: (B)

The resource-based view (RBV) analyzes a firm's competitive advantage by emphasizing its internal resources and capabilities. This approach posits that the unique combination of a firm's tangible and intangible resources—such as human capital, technological expertise, brand reputation, and organizational culture—can lead to sustained competitive advantage if they are valuable, rare, inimitable, and non-substitutable. By focusing on what a firm already possesses internally, the resource-based view allows for a more comprehensive understanding of how these resources can be leveraged to create superior value in the marketplace. This contrasts with other approaches that might prioritize external factors, such as market trends or political influences, which are often less controllable. The RBV encourages firms to identify and cultivate their specific strengths, fostering a competitive edge that is rooted in their unique capabilities rather than simply reacting to external conditions or striving for customer satisfaction solely as a goal.

The resource-based view (RBV) analyzes a firm's competitive advantage by emphasizing its internal resources and capabilities. This approach posits that the unique combination of a firm's tangible and intangible resources—such as human capital, technological expertise, brand reputation, and organizational culture—can lead to sustained competitive advantage if they are valuable, rare, inimitable, and non-substitutable.

By focusing on what a firm already possesses internally, the resource-based view allows for a more comprehensive understanding of how these resources can be leveraged to create superior value in the marketplace. This contrasts with other approaches that might prioritize external factors, such as market trends or political influences, which are often less controllable. The RBV encourages firms to identify and cultivate their specific strengths, fostering a competitive edge that is rooted in their unique capabilities rather than simply reacting to external conditions or striving for customer satisfaction solely as a goal.