The resource based model of above average returns

From the first e-Activity, determine which of the two primary drivers of the competitive landscape is more influential.

The resource based model of above average returns

The key component for business success. Definition Competitive advantage means superior performance relative to other competitors in the same industry or superior performance relative to the industry average. There is no one answer about what is competitive advantage or one way to measure it, and for the right reason.

The resource based model of above average returns

Nearly everything can be considered as competitive edge, e. Every company must have at least one advantage to successfully compete in the market. There are many ways to achieve the advantage but only two basic types of it: A company that is able to achieve superiority in cost or differentiation is able to offer consumers the products at lower costs or with higher degree of differentiation and most importantly, is able to compete with its rivals.

An organization that is capable of outperforming its competitors over a long period of time has sustainable competitive advantage. The following diagram illustrates the basic competitive advantage model, which is explained below in the article: How a company can achieve it?

An organization can achieve an edge over its competitors in the following two ways: When PEST factors change, many opportunities can appear that, if seized upon, could provide many benefits for an organization.

Accounting Rate of Return (ARR)

A company can also gain an upper hand over its competitors when its capable to respond to external changes faster than other organizations.

By developing them inside the company. A firm can achieve cost or differentiation advantage when it develops VRIO resources, unique competences or through innovative processes and products.

When these factors change many opportunities arise that can be exploited by an organization to achieve superiority over its rivals.

For example, new superior machinery, which is manufactured and sold only in South Korea, would result in lower production costs for Korean companies and they would gain cost advantage against competitors in a global environment.

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For example, Subway and KFC. If opportunities appear due to changes in external environment why not all companies are able to profit from that? The advantage can also be gained when a company is the first one to exploit the external change.

Otherwise, if a company is slow to respond to changes it may never benefit from the arising opportunities. A company that possesses VRIO valuable, rare, hard to imitate and organized resources has an edge over its competitors due to superiority of such resources.

If one company has gained VRIO resource, no other company can acquire it at least temporarily. The following resources have VRIO attributes: Intellectual property patents, copyrights, trademarks Brand equity Know-how Reputation Unique competences.

Competence is an ability to perform tasks successfully and is a cluster of related skills, knowledge, capabilities and processes. A company that has developed a competence in producing miniaturized electronics would get at least temporary advantage as other companies would find it very hard to replicate the processes, skills, knowledge and capabilities needed for that competence.

Most often, a company gains superiority through innovation. Innovative products, processes or new business models provide strong competitive edge due to the first mover advantage. Two basic types M.

Porter has identified 2 basic types of competitive advantage: Porter argued that a company could achieve superior performance by producing similar quality products or services but at lower costs.

In this case, company sells products at the same price as competitors but reaps higher profit margins because of lower production costs.

The company that tries to achieve cost advantage like Amazon. Higher profit margins lead to further price reductions, more investments in process innovation and ultimately greater value for customers.

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Differentiation advantage is achieved by offering unique products and services and charging premium price for that. Differentiation strategy is used in this situation and company positions itself more on branding, advertising, design, quality and new product development like Apple Inc.

Customers are willing to pay higher price only for unique features and the best quality.

The resource based model of above average returns

The cost leadership and differentiation strategies are not the only strategies used to gain competitive advantage. Innovation strategy is used to develop new or better products, processes or business models that grant competitive edge over competitors.

Looking inside for Comp.The Resource Based model suggests the following in order to earn above average returns within his or her organization. At least five steps are worth noting. They are resources, capability, competitive advantage, industry is attractive .

Explain which model (the I/O model or the resource-based model) you believe will best help a firm in the industry you researched earn above-average returns. (Be sure to clearly identify the industry in your post.) Describe the failure you researched in the e-activity and discuss the causes that led to it.

Pick a publicly traded company. Describe its competitive advantage using the resource-based model of above average returns. Get professional help with your . Identify the strategy called for by the attractive industry to earn above-average returns.

Selection of a strategy linked with above- average returns in a particular industry The External Environment An Attractive Industry Strategy Formulation The I/O Model of Above-Average Returns. Resource Based View and Industrial Organization View. Print Reference this % within the age group of 15 years to 64 years and only % within the age of 65 years and above (DoS, ).

View (I/O View) approach advocates on the importance of anticipating the external forces whereas the other known as the Resource Based View (RBV. Describe and discuss the resource-based model of above-average returns.

ANS: The resource-based model focuses on the firm’s internal resources and capabilities. These resources and capabilities determine the firm’s strategy and its ability to earn above-average returns%(23).

What is the difference between industrial organisation model and reosurce based model