FINE 4050 Study Guide - Final Guide: Management System, Profit Margin, Switching Barriers
17 Dec 2017
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Understanding the rbv (resource-based view) of the firm. All firms have certain resources used to create value. Company"s may contract out certain resources or own others. How firms utilize such resources are important decisions made by the management. Firms also recognize how competitively advantageous certain resources are. Rbv is good for gaining insight into why certain companies are more profitable. Types of resources: tangible, easily identifiable, physical assets, value arises from location, capacity and components, easier to imitate. Intangible: harder to identify, not concrete, difficult for competitors to imitate, includes: human resources, innovation resources, reputation resources, firms culture may also be one, organizational capabilities, competencies and skills that a firm employs to transform assets into outputs. However, resources do not lead to a competitive advantage, resources can increase revenues at first but competitors can quickly learn to imitate or substitute their products.
