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Definition

Making a Resource Valuable

Once managers identify their firm’s tangible assets, intangible assets, and organizational capabilities , the RBV applies a set of guidelines to determine which of those resources represent strengths or weaknesses which resources generate core competencies that are sources of sustained competitive advantage. These RBV guidelines derive from the idea that resources are more valuable when they

  1. Are critical to being able to meet a customer’s need better than other alternatives.
  2. Are scarce -few others if any posses that resource or skill to the degree you do.
  3. Drive a key portion of overall profits, in a manner controlled by your firm.
  4. Are durable or sustainable over time.

Before proceeding to explain each basis for making resources valuable, we suggest that you keep in mind a simple, useful idea: Resources are most valuable when they meet all four of these guidelines.

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