Firm Resources And Sustained Competitive Advantage

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Firm Resources and Sustained Competitive Advantage
Understanding sources of Sustained Competitive Advantage is extremely crucial to survive in the industry and this has become a major area of research in the field of strategic management. This paper correlates the relation between firm resources and sustained competitive advantage, based on the presumption that strategic resources are distributed across the firm.
The following framework (SWOT Analysis) is designed to model the structure of this research, showing how a firm can sustain its competitive advantage by implementing strategies that: Exploit Strengths, respond to Opportunities, neutralize Threats and avoid Weaknesses.

This framework is based on two assumptions: Firms within an industry control the same strategically relevant resources and pursue the same strategies, making them identical to each other. Secondly, if resource diversity develops in the industry, it will be short-lived as the existing resources used by the firms to implement their strategies are very mobile.
This paper defines some key concepts and analyze the role of individual, immobile firm resources in creating sustained competitive advantages.
Firm Resources:
All assets, capabilities, organizational processes, firm attributes, etc which are controlled by firms, can be used to implement strategies more efficiently and effectively. These firm resources can be classified into three important categories: Physical Capital- e.g. technologies, infrastructures; Human Capital- e.g. training, experience, worker and manager skills; and Organizational capital- e.g. a firm’s formal reporting structure, formal and informal planning, etc. These resources can be helpful in specific conditions , thereby enabling a...

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...dvantage. Few of the examples applying this framework has been shown in this paper: Strategic Planning, Information Processing System and Positive Reputation.
Limitations and critical reflections:
The paper has been written almost 24 years ago and a lot of the methods and conventions, especially regarding technology, has changed over the years. Most of the firms are extremely dependent on technology, so Information processing system is crucial in today’s world for S.C.A. Moreover, if having the four criterion is important for S.C.A, how do companies like Coca Cola and PepsiCo, Adidas and Puma, have survived over the years and maintained their profitability? In today’s world, isn’t it difficult to come up with resources that match all four criteria for S.C.A.? Do the sources have to be Heterogeneous and Immobile, or can they be homogeneous and mobile resources now?

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