This is one essay of the Harvard Business Review, use easy words to read or understand. In the first part of the article, it describes the changing stress of “Strategy”, from market structure to resource of a firm and integration of both. In main part, it tells us( mainly for manager of companies) how to capture “Core competence”(it says “distinctive competence”) with some active examples.
The role of manager is so important to make strategy and keeping the firm profitable in the competition, as the essay says. In making strategy, it is important evaluate the firm, typically core-competence. However, managers often make mistake in the process. This article gives them solutions.
First of all, managers have to know what makes a resource valuable, they are following;
・Demand(does it meet customer’s needs, and is it competitively superior?)
・Scarcity(is it imitable or sustainable, and is it durable?)
・Appropriately(who owns the profit?)
Second, they should ask following questions;
１、 The test of inimitability: Is the resource hard to copy?
２、 The test of durability: How quickly does this resource depreciate?
３、 The test of appropriability: Who captures the value that the resource creates?
４、 The test of substitutability: Can a unique resource be trumped by different resource?
５、 The test of competitive superiority: Whose resource is really better?
Of course, these questions have to be asked continuously, because firms and markets are always changing.
URL:http://www.fsc.yorku.ca/york/istheory/wiki/index.php/Resource-based_view_of_the_firm
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