Introduction

During recent years, a theory of how companies compete, that is peculiar to the area of strategic management, has started to arise. The Resource-Based View has some valuable perspective as one of the models in the management field (Wright and McMahan, 1992, p. 305)). Other researchers are concerned whether the new prototype offers further understanding of ancient understandings. Undoubtedly, resource-based functions have been known to be dependable with and evenly entrenched in the tradition of policy research. The perception that corporations are profoundly dissimilar with regards to internal competencies and their resources has for a long time been regarded as an essential aspect of strategic management. The final approach to the formation of strategy, for instance, starts with the evaluation of resources and competencies within an organization. Those that are either superior or distinctive as related to those of their competitors might be considered as the foundation of competitive advantage in case they are expertly matched to other environmental prospects. These perceptions might be regarded as the fundamental ideologies upon which the research on resource-based structures continues to develop.

Whereas the model might be in the developmental phase, it has helped in deepening our understanding of the way resources can be compiled and applied, what ensures that competitive advantage becomes sustainable, the foundations of heterogeneity and the origin of rents. The objective of this paper is to cultivate a universal prototype of company performance and resources while integrating the diverse elements of research that offer a common ground. The paper aims to establish compromise for a mean model, make clarifications on fundamental concerns, give suggestions on probable effects and in doing so, ensure that the research continues among other scholars. Even though the Resource-Based model is an essential tool for promoting sustainability and management of critical resources, the model cannot be used as a substitute for other strategies like game theory and Porters Five Model, but it can be regarded as a complement to these analytical tools.

The concept of RBV for strategy

As a market becomes dynamic, business resources further need to be altered over a specified period thus ensuring that they become relevant to the diverse market situations. This perception is founded on the aspect of dynamic capabilities and is considered as the result of the resource-based view. Dynamic competences have been identified as the procedure of a business that utilizes specific resources particularly for integration, gain, release funds and reconfiguration (Pisano, 2017, p. 753). Whereas RBV is connected to the types of capabilities and resources for its strategic significance, the vibrant competence concentrates on the way the skills and resources should be altered or updated over a long period to ascertain their importance in the dynamic market place. The RBV takes into consideration the competencies and resources as stationary thus can be regarded as static at specific instances and might be in that position over a long time. The main point is that whenever businesses attain rare, valuable, non-sustainable and imitable resources, it ensures that the company develops strategies which promote the value and cannot be copied by competing businesses. Nevertheless, in the time of vibrant economic growth, it is essential for companies to develop improved competencies and capabilities for the sustenance of competitive advantage.

Resources are supposed to be valuable, and RBV perceives resources as essential because they assist a business in implementing approaches that boost the effectiveness and efficiency of business through the exploitation of opportunities or through controlling threats. Secondly, resources are always considered as rare and can be obtained by a few corporations. In case the funds are possessed in considerable amounts in a specific industry, every player has the potential of exploiting the resource similarly thus implementing a universal plan that offers none of the rivals a competitive advantage. Thirdly, the other criteria that should be attained by resources are that they are supposed to be expensive and hard to substitute or imitate. RBV requires that resources should not be imitable due to the peculiarity in historical aspects, social complexity, and causal ambiguity. In case the resources belonging to a company are rare, valuable and imitable, the focal organization has the power to get a sustainable and competitive niche over time. However, there is one essential principle that should be present within a company; organization-wide support.

Empirical Evidence

The competition between Samsung and Apple Inc. is a good illustration of two companies that are in the same industry and face similar external forces thus attaining different organizational performance. Samsung competes with Apple in smartphones and tablets where Apple sells its products at a higher cost thus reaping high returns. Samsung chooses not to follow the same procedure because it lacks the same reputation that can enable it to design products that are user-friendly like Apple. Google also uses RBV in its ability to cope with people effectively and is regarded as a source of cost advantages and differentiation. Dissimilar to other companies that depend on relationship and trust in managing workers, Google utilizes employee data to control their workers. Apart from being valuable, it is further seen as a unique capability since no other corporation employs data in managing its workers in such a broad way as Google does. The Lanficio Leo is a wool company that utilizes production that is design-oriented production which is incorporated into the management prototype thus ensuring that they mix cultural heritage and business procedures. The company uses an improved development strategy that is founded on the work in progress aspect through insignificant investments as well as objectives that are tailored thus supporting a resource-based view.

Atkinson & Co have been making coffee since 1837 even though its original ownership only survived for two generations. The company was owned by a couple who later left it in the hands of their children. The core business is founded o he commitment of cultural heritage of coffee roasting and blending of tea. The cultural heritage provides the company with a peculiar selling point that cannot be imitated and is an essential component of the resource-based view. The Haitoglou Bros. SA have for a long time developed an industrial scale workshop as a family business. The brand is recognized for its superior products, hygiene, and safety. The skill of manufacturing the products has been passed through generations thus ensuring that they are preserved. The preservation of these skills is an aspect of the resource-based view and ensures that the company produces items that are of unique quality. In GKRR plc, the integral enrolment of engineers was based on the R&D functions every year. The projects that were assigned to the company were founded on operating companies and were managed by tutors. Traditional measures were used in assessing performance measures in a cause and effect diagram which is one of the essential features of the resource-based view.

Toyota has been able to differentiate its operations from other corporations like General Motors because of its super productivity and quality. The brand has consequently won the confidence of customers thus being a moving company. Since RBV assumes that the performance and resources of a company promote the theory of strategic management, Mc Donald’s utilizes this aspect by delivering low-cost services at its famous fast food chains. Dell is also another company that created s capability that is network-based that enabled the integration of product design and delivery of computers that are customized. Therefore, the company used RBV to offer a theoretical foundation for comprehending interrelationships and flexibility, thus, allowing the creation of a competitive advantage over other companies. Even though Sainsbury, Asda, and Tesco are business rivals, Tesco is seen as a better competitor due to its heterogeneous effect with regards to management, experience, and retail sites.

Critical Analysis

The issue of heterogeneity in business might be used as a reflection of the possibility of greater productive aspects which usually have a constrained supply (Sekaran and Bougie, 2016). Most of the elements are typically fixed and therefore cannot be enlarged. In most instances, they are found to be quasi-fixed in that their supply can never be quickly extended. They are also regarded as scarce in that they are not enough to entirely fulfill the demands of the services.

Consequently, the inferior resources are included in the production process. The argument is found to be familiar with the Ricardian principle. It might be comprehended by making assumptions that companies with vast resources have reduced average expenses as compared to other corporations. The businesses with reduced costs include supply curves that are inelastic such that they are unable to enlarge their outputs quickly, despite the increase in prices. An increase in prices, nevertheless, induces other businesses that are less-efficient to get into the industry. These companies might enter and generate as long as their costs go above the marginal expenses.

Instability, the supply and demand in an industry usually balance, increased expenses break even, and reduced costs that are earned by companies generate profits that are supernormal in terms of rent to their resources that are usually scarce (Holloway, 2017). This model is notably consistent with the idea of competitive behavior in the market of production. Most businesses as price takers and as a result they yield at a juncture where the price can be equated to marginal cost. The increased returns of the companies that are efficient cannot be connected to restrictions that are artificial of market strength and output. They do not also rely on incomplete peculiarity sense. The Ricardian theory is linked to resources that are fixed in the supply chain (Koh et al. 2017, p. 1535). The model might, however, be applied to resources that are quasi-fixed, which are considered to be significant. These types of resources while being limited in the short run, might also be enlarged and renewed incrementally within a business that uses them. The use of such funds might assist in expanding the enterprise.

The principle of heterogeneity has similar consistency with the concepts of monopoly and market strength identical to what is seen in the Ricardian story (Barney and Mackey, 2018, p. 364). The difference between Ricardian accounts and monopoly is the fact that profits in a monopoly are attained through the predetermined limit of production instead of an inherent lack of supply in resources. In monopoly theory, heterogeneity might be accomplished through product differentiation or spatial competition. It might, therefore, be regarded as a reflection of localized monopoly and uniqueness and may be caused by the presence of mobility hindrances that come from the intra-industry that give the differences of companies from each other. Dissimilar to Ricardian prototypes, most are considered as strategic in that businesses consider their behavior and the relative status of their competitors. Homogenous companies might also be in a position to attain domination rents.

Despite the nature of the rents, maintenance of a competitive advantage prompts that the heterogeneity circumstance is maintained. In case the heterogeneity is a short-lived phenomenon, the leases have a high likelihood of fleeting. Because strategists are concerned with rents accrued over a long period, the situation of heterogeneity is supposed to be comparatively resilient for it to add some worth. This can be the situation in case there are ex-post constraints to the competition. It means that consequent to a company getting superpositions in attaining rents, there are supposed to be forces which control the competition for the leases. Competition has a probability of dissipating rents through an increase in the supply of limited resources.

On the other hand, it might weaken the attempt by monopolists to limit production. Ex post rivalry destroys domination rents by introducing an increase in output or by ensuring that personal demand curves become flexible. Heterogeneity motivates the situation of poor mobility (Heckhausen and Heckhausen, 2018, p.10). Heterogeneous resources are not necessarily supposed to be regarded as improperly movable. Resources might be immobile based on their firm-specific or idiosyncratic nature that might be heterogeneous. The production of superior resources relies on their unemployment nature and the technique with which a particular approach founded on the supremacy of a resource is implemented.

One of the main contributions of the resource-based model is that it explains the variations that are long-lived in a business that cannot be connected to the differences in the circumstances of an industry. There is considerable proof that connects that the participation in the sector has not well illustrated such variations. There are fewer agreements on the relative firm magnitudes, even though some of the studies show that these effects can be regarded as considerable. Practically, the model might prove to be helpful to managers who seek to comprehend, extend or serve competitive advantage. Whereas the replica itself can be availed to each, its strategic effects rely on the specific endowment of resources in a company. A company might acquire expectation benefits by scrutinizing the information regarding the assets that it has control over. As long as the company’s assets are inimitable, non-substitutable and mobile, other companies might be unable to copy the strategy used. Therefore, the use of the model might not boost competition for available rents. It might just make sure that every business improves the application of its specialized resources. Based on its focus on mobile resources that are imperfect where the cost of the transaction is high, the theory of resource base has essential effects for the corporate strategy and concerns that are connected to the single business strategy.

Even though having immobile and heterogeneous possessions is essential in attaining competitive advantage, it is not adequate in case a business wishes to maintain the same trend.  The VRIO framework examines the available resources and whether they could be expensive, non-substitutable and rare to copy (Glavas and Mish, 2015, p. 635). The capabilities and resources that give positive responses to all the concerns are the competitive advantages that are sustained. The VRIO framework was later improved to VRIO and VRIN by including the interest of whether an organization can exploit the available resources. The proponents of RBV assert that companies should focus on the internal aspects instead of concentrating on the competitive environment. For companies to change the resources into sustainable competitive advantages, funds are supposed to have four characteristics that are summarized in the VRIO structure.

The company resources do not form any competitive advantage for a corporation in case the organization is not built in a manner that sufficiently exploits the resources and obtains their worth. The principal organization thus requires the probability of assembling and coordinating the resources efficiently. Some typical examples of the organizational constituents include the official reporting structure of a company, budgeting structures, compensation policies, and control structures. Without the appropriate corporate acquisition, imperfect and rare resources might not form a sustainable competitive advantage. When all the four attributes of VRIO are present, an organization can assume the peculiar competence which can be applied as one of the sources of sustainable competitive advantage.

Conclusion

Regardless of the debate regarding RBV, it is true that sustainability should be considered as a function of the businesses’ immobility and critical resources (Kimiti and Kilika, 2018, p. 13). The concern that makes the essential resources worthy affirms that the concept of product-market has further been necessary for tackling this concern. Resource-Based Theory cannot be used as a substitute for game theory and Porters Five Model. Instead, it can be regarded as a complement to these analytical tools. At the level of single business phase, the prototype might assist managers in differentiating between the nature of resources which may encourage a competitive advantage from other resources that are less valuable. Managers should consider if the productivity has anything to do with a specific team of researchers which he takes part (Bryman, 2016). A perception that is resource-based might further assist a company in making decisions on whether to give a license to new technological forms or have it internally developed.

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