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Firm Resources and Sustained Competitive Advantage


What is Firm Resources?

Firm resources include all assets, capabilities, organizational processes, firm attributes, information: knowledge etc. controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness.
firm resources can be classified into three categories
Physical Resources
Human Resources
Organizational Resources
Physical capital resources include the physical technology used in a firm, a firm's plant and equipment, its geographic location, and its access to raw materials.
Human capital resources include the training, experience, judgment, intelligence, relationships, and insight of individual managers and workers in a firm.
Organizational capital resources include a firm's formal reporting structure, its formal and informal planning, controlling, and coordinating systems, as well as informal relations among groups within a firm and between a firm and those in its environment.
Although, not all aspects of a firm's physical capital, human capital, and organizational capital are strategically relevant resources. Some of these, firm attributes may prevent a firm from conceiving of and implementing valuable strategies. Others may lead a firm to conceive of and implement strategies that reduce its effectiveness and efficiency. Still others may have no impact on a firm's strategizing processes. However, those attributes of a firm's physical, human,
and organizational capital that do enable a firm to conceive of and implement strategies that improve its efficiency and effectiveness.
Competitive Advantage: A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors.
Sustained Competitive Advantage: A firm is said to have a sustained competitive advantage when Firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and other competing firms are unable to duplicate the benefits of this strategy.

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