The resource‐based view revisited: Comparative firm advantage, willingness‐based isolating mechanisms and competitive heterogeneity

Abstract

We take a step beyond the resource-based view that resource characteristics (i.e., valuable, rare, inimitable and non-substitutable) are the sole basis for isolating mechanisms. Instead, we apply Ricardo's principle of Comparative Advantage in a two-firm, two-product scenario to show how additional isolating mechanisms can result from economic incentives that provide managers with distinct strategic choices. Specifically, our analysis indicates that managers' strategic decisions based on comparative firm advantage (CFA) affect their willingness to imitate competitors, even when their firms are fully capable of such imitation. This willingness, in turn, helps to determine the direction of firm expansion. We discuss how Ricardo's CFA logic can provide specific guidance for managers regarding effective firm strategies in specific comparative advantage situations by factoring in both internal efficiencies and competitive pressures when designing and implementing rent-seeking strategies.European Management Review (201 0) 7, 91 -1 00.

Understanding the Generation of Value along Supply Chains: Balancing Control Information and Relational Governance Mechanisms in Downstream and Upstream Relationships

“…Value creation is determined by consumers' willingness to pay [53] which relies on both the drivers of customers' value perceptions [86] and the ability to select adequate competitors [87]. Because value creation is determined by consumer evaluations, the literature has largely analysed the relationship between production characteristics and consumer choices [88].…”

“…A list of the specific items for our constructs is presented in Appendix A. A seven-point Likert scale with the end points 'strongly disagree' and 'strongly agree' was used to capture responses for all of the items, with the exception of value variables, for which the end points 'much worse' and 'much better' were used, because the value generation process implies competitive decisions in dynamic markets, value-based features were measured in comparison with competitors' relative situation [85,87]. To the extent possible, we adopted existing tested scales from previous supply chain studies, which were adapted to the specific context where appropriate.…”

Red Queen Competitive Imitation in the UK Mobile Phone Industry

“…It is not difficult to see that changes in the technological environment that drive new product introductions are often central to the types of moves that drive Red Queen competition. For example, recent studies in the imitation and technology innovation literature (Argyres, Bigelow, & Nickerson, 2015;Giachetti & Lanzolla, 2016;Madhok, Li & Priem, 2010;Posen, Lee, & Yi, 2013) show that as industries evolve, changes in technologies and subsequently their diffusion can influence rates of imitation. Their observation complements prior work by authors such as Utterback and Suarez (1993), who point out that as the industries mature, they tend to transition from high to low levels of product technology heterogeneity, where low levels of product technology heterogeneity correspond to the emergence of design dominance.…”

“…Recent studies in the strategy and technology innovation literature (Argyres, Bigelow & Nickerson, 2015;Giachetti & Lanzolla, 2016;Madhok et al, 2010;Posen et al, 2013) suggest that evolving industry characteristics, in particular changes that are caused by the environment. This in turn constrains the firms' ability to learn from rivals, reducing effectiveness of imitation as a competitive weapon.…”

Isolating mechanisms as sustainability factors of resource-based competitive advantage

“…There are two approaches to value appropriation in the current literature: 1. A short-term appropriation of current gains by particular partners and other stakeholders based on bargaining power and appropriability regime (Madhok et al 2010, Coff 2010, 2003, 1999, Chacar & Coff 2000, Hurmelinna-Laukkanen &Puumalainen 2007). 2.…”