ECON 106T Lecture Notes - Lecture 4: Resource-Based View, Switching Barriers
Document Summary
Competitive advantages depend on a firm"s: resources things that can be acquired (e. g. factories), capabilities things that develop with time (e. g. knowledge, routines). Threats to sustainability: imitation, appropriability, hold up, substitution, slack. We"ll discuss ways to achieve sustainability: early mover advantages, networks of activities, core competencies. List of competitive advantages: expertise in search, network of advertisers, quality of people, culture of innovation, range of complementary products (with network effects and switching costs, server farms (increasing returns to scale, data (about everything and everyone) Physical access to resources: literal scarcity (diamond mines, legal restrictions (patents; trademarks; licenses, privileged access to buyers or suppliers (long-term contracts) Barriers to imitation: managerial: perception, managers don"t know firm is behind, e. g. Managers ask current customers, not suture ones: inspiration, managers don"t know what to do about it, e. g. Motivation: managers don"t want to do anything about it, e. g. Managers have fiefdoms, or don"t admit past errors.
