Competing on Resources: Strategy in the 1990s by Collis and Montgomery

The article was clear and well organized. It actually cleared up some questions I had about Porter’s forces and the definition of core competences. The arguments were sound and logical.

Outline

I. Framework of resources

   A. Internal analysis

   B. External analysis

II. Competitively Valuable Resources

  1. Scarcity
  2. Appropriability
  3. Demand

III. Resources as an Effective Strategy

  1. The test of inimitability: Is the resource hard to copy? (physical uniqueness, path dependency, casual ambiguity, economic deterrence)
  2. The test of durability: How quickly does this resource depreciate?
  3. The test of appropriability: Who captures the value that the resource creates?
  4. The test of substitutability: can a unique resource of trumped by a different resource?
  5. The test of competitive superiority: Whose resource is really better?

IV. Strategic Implications

  1. Investing in Resources
  2. Upgrading Resources.
  3. Leveraging Resources: resource contributive competitive advantage.

 

The main points of the article are the following:

–          Superior performance is based on a development that is competitively distinct.

–          The History of Strategy: Strategy is the match beween what a company can do (organizational strength and weaknesses) with in the universe of what it might do (environmental opportunities and threats). (121)

–          The core competence should be an external assessment of what it does better than competition.

–          Core competence identifies the critical role that the corporate office has to play in order to guard their strengths or jewels of their corporation (125).

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