Question

1. Explain what RBV is? 2. What are the sources of competitive advantage based on RBV? 3. What is the name of the alternative to RBV? I

Answer 1

Answers with explanations:

1. Ans: RBV which refers to resource-based view is an approach which sees the resources of the organisations as the major producers of the sustained competitive advantage if they are Valuable, Rare, Costly to Imitate, Organized. The proponents of this model argue that companies should look inside their company to find potential sources of competitive advantage rather than looking outside. Resource-based view proposes that it is rational and wise for the organisation to exploit and leverage from external opportunities using the inside resources in some new way. In the RBV model, resources are considered supreme for an organisation to gain and then sustain that competitive advantage.

2. Ans: According to the Resource-based view, resources which carry the following characteristics are the potential sources of the competitive advantage:
(A). Valuable: The resource must be of value to the organisation and should, therefore, exploit the external opportunities or neutralising the external threats provided by the organisation's environment.

(B). Rare: The resource available to the firm should be rare and unique among the competitors of the firm, the resource should not result in competitive parity but should yield the rarity.

(C). Costly to imitate: The resource must be prohibitive for the competitors or the new entrants to copy and should not be easily substituted with another resource
(D). Organized: An organisation in order to fully exploit from the valuable, rare and inimitable must be organised enough.

3. Ans: The Alternative name of Resource-Based view is VRIO approach which is an acronym for Value, Rare, Costly to imitate, and Organised. This model was developed by Jay Barney.