Column 2 · Competition and Timing · Era 4, Orientation and Relationships (1990s)
Resource-Advantage Theory
Inputs: resources and assets · Landmark · Cluster I, Strategic Choice
Description
Resource-advantage theory holds that competition is a constant struggle among firms for comparative advantages in resources that yield marketplace positions of competitive advantage and superior financial performance, in contrast to the equilibrium of neoclassical perfect competition.
Managerial Implications
Competition is a constant struggle for advantages in resources that produce superior value for some segment at lower cost. Firms learn from performance signals and rivals imitate. Managers should inventory resources that are rare and hard to copy, including relationships, brands, and knowledge, and target segments where those resources matter most. Advantage is temporary, so the process of renewing resources is itself the strategy.