What insights does the “resource based view” of Strategy add to an understanding of competitive advantage that the “design school” model leaves out?
Competitive Advantage A company is said to be in competitive advantage when it develops or get hold of attribute which helps it to do better than its competitors in terms of higher rate of return on investment. Competitive advantage occurs when firm develops or acquire unique attributes which help it to outperform its competitors. This attributes can be new technology, business process, highly skilled technical resources etc. Resource Based View (RBV) Design school theory of business strategy caters mainly for external environment and leaves out any internal resources. Resource base view (RBV) is used to determine internal resources from within the firm contributing towards greater financial performance (Kearns & Lederer, 2003). The core of the RBV emphasises that organisation to maximise rate of return and financial profitability and form sustainable competitive advantage, should have heterogeneous resources and capabilities. The resources in question should be inimitable an...