Marketing

Resource-Based Strategy

`Marketing capabilities are sometimes distinctive , sometimes reproducible . The importance of the distinction for strategy is this Only distinctive capabilities can be the basis of sustainable competitive advantage ' John Kay A company 's strategy consists of the competitive efforts and business approaches that managers employ to customers , compete successfully , and achieve organizational objectives . It represents management 's answers to such fundamental business questions as whether to concentrate on a single business or build a diversified group of business , which cater to a broad range of customer or focus on

a particular market niche . A strategy thus reflects the managerial choices among alternatives and signals organizational commitment to particular products , markets , competitive approaches , and ways of operating the enterprise (Hooley et al . 2001 Kay 1999

In discussing the formulation of strategy , Kay (1999 ) argues that it is a process of analyzing the firm 's strengths and weaknesses within the markets in which it operates . Kay (1999 ) thus assert that analysis answers two fundamental questions in strategy formulation . First , what are the sources of competitive advantage for a company to succeed Second , how can a company reach an attractive competitive position and create a sustainable competitive advantage

Sustainable competitive advantage as argued by John Kay is only achieved if the company has distinctive capabilities or resources that its competitors does not have . Kay (1999 ) argues that resources can be considered as unique or reproducible . A unique resource , for example the brand name of ABB , can be considered as an important asset that can be a basis of sustainable competitive advantage . A reproducible resource and capabilities , on the other hand , pertains to assets that can be easily copied or reproduced by competitors and does not offer the company the distinctive competitive advantage . A good example of a reproducible resource would be the process of manufacturing distribution transformers . Many are now able to produce distribution transformers on their own and can learn the process more very quickly and easily (Kay 1999

Therefore , Kay 's argument depicts a part of the process of strategy formulation requires managers to view the current position and resources at its disposal and resources that needs to be acquired in to meet market expectations . The researcher will first look at the different views in strategic management . To appreciate the contribution of resource-based view to strategic management , the researcher will describe the trend in the development of strategic management . Moreover the researcher will discuss the resource-based view of strategy and how this view support that strategy formulation requires a good understanding of the current market position , which includes its resources and capabilities , and how the company can take advantage of market opportunities . Lastly , we shall look into the sources of competitive advantage and we shall discuss a tool often used to identify these capabilities and resources

But , before proceeding further into the discussion of the different views in strategic management , our working definition of competitive advantage will be the ability of a firm to generate economic rents from...