MGT437H5 Lecture 1: Reading summary 3
Document Summary
Whenever a irm does exceedingly well, one must consider whether it beneited from unusually good luck. Conversely, an underperforming irm might have had bad luck. Since good luck is unlikely to persist one should not always expect irms to repeat extreme performances, whether good or bad, for long. Firms must possess diferent resources and capabiliies, and it must be diicult for underperforming irms to obtain the resources and capabiliies of the top performers. Resource heterogeneity is an important framework in strategy. To be sustainable, a compeiive advantage must be underpinned by resources and capabiliies that are scarce and imperfectly mobile. Before irms can sustain advantage they must create it. Simply put, irms create advantage by exploiing opportuniies that other irms either ignore or cannot exploit. Seizing such opportuniies is the essence of entrepreneurship, which is oten seen as synonymous with discovery and innovaion. Some irms are successful because they have tacit capabiliies.
