technology is the more influential primary driver of the competitive landscape.
ID: 428713 • Letter: T
Question
technology is the more influential primary driver of the competitive landscape. Technology will allow a company can optimize its performance. In a competitive industry, a company has to remain current with technology to stay afloat with their competitors. For example, the agricultural industry must keep upgrading technology to keep pace with others in the same market.
Explain which model (I / O model or resource-based model) you believe will best help a firm in the industry you researched earn above-average returns.
Using the resource-based model will help in the agriculture industry by constructing a realistic plan of strategy to implement. The resource-based model can help a firm achieve a substantial return. Also, by using the firm's own resources they will be able to view their capabilities.
Explanation / Answer
The I/O (Industrial Organizational) model adopts an external perspective which means that factors and forces outside the organization determines the strategies required by the organization to earn above average returns . On the other hand the resource based model focuses on the organization's internal resources and capabilities are more key to earning above average returns for the organization . In my view the resource based model is more suitable for earning above average return for the industry I researched that is the consumer durable battery industry where battery is used in torches , remote controls , old age radios , toys etc. The resource based model is focussed upon attaining and sustaining a distinct competitive advantage for organizations based upon their resources and capabilities .
Resources and capabilities are key for sustaining a distinct competitive advantage for companies today . Let us first define what are resources of any organization and what are the capabilities . For any organization resources are the human capital it has , its financial base , the inventories it has access to , the machinery it uses or it has access to , the information technology it uses and the process or production technology it uses . Now how an organization manages all the above listed resources to attain and sustain a distinct competitive advantage over others in the competitition is organizations capability . In this context in 1991 Barney has come up with a VRIN (Valuable , Rare , Imperfectly Imitable & Non-Substitutable) resource based view of the organization . According to him to attain and sustain a distinct competitive an organizations resources and capabilities must be :
A. Valuable : Resources and capabilities must be alligned & focussed to improve the overall organizations effectiveness & efficiency and decrease the weaknesses it has .
B. Rare : Others in the competition should not have access to these resources and capabilities must be hard to build for others.
C. Imperfectly Imitable : Others in the competition should not have means to attain these or copy them . If they try to attain these they should become financially unstable .
D. Non-Substitutable : Others in the competition should not be able to substitute these with other available resources and capabilities .
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