Resource-Based View

Resource-Based View is a strategic approach that harnesses valuable, rare, and inimitable resources and capabilities to gain sustainable competitive advantage. It encompasses identifying, protecting, and leveraging tangible and intangible resources, leading to differentiation, value creation, and industry leadership.

Origins of the Resource-Based View

The Resource-Based View (RBV) of the firm has its roots in the field of strategic management and was first introduced in the early 1980s by scholars Wernerfelt, Rumelt, and Barney. However, it gained significant prominence and recognition through the work of Jay Barney, who further developed and popularized the concept in the 1990s. The RBV emerged as a response to the shortcomings of traditional industry-based approaches to strategy, such as Porter’s Five Forces Model, which focused primarily on external factors affecting a firm’s competitive position.

Core Concepts of the Resource-Based View

The RBV introduces several core concepts and ideas that are central to its framework:

1. Resources and Capabilities:

  • Resources: Resources refer to the tangible and intangible assets owned, controlled, or accessible to a firm. These assets can include physical assets (e.g., machinery, technology), human assets (e.g., skilled workforce), organizational assets (e.g., efficient processes), and intangible assets (e.g., brand reputation, patents).
  • Capabilities: Capabilities, on the other hand, are the firm’s ability to deploy and use its resources to achieve specific tasks or activities effectively. They represent the firm’s capacity to perform tasks, make decisions, and adapt to changes in the business environment.

2. Sustainable Competitive Advantage:

  • The RBV posits that not all resources and capabilities are valuable or rare enough to provide a competitive advantage. To achieve sustainable competitive advantage, a firm must possess resources or capabilities that are valuable, rare, difficult to imitate, and non-substitutable (often referred to as the VRIN criteria).
  • Valuable resources or capabilities enable a firm to exploit opportunities or mitigate threats in the market, while rare resources or capabilities are not commonly found in the industry, giving the firm a unique advantage.
  • The difficulty of imitation and the absence of substitutes make it challenging for competitors to replicate a firm’s competitive advantage.

3. Resource Heterogeneity and Immobility:

  • Resource heterogeneity suggests that firms within the same industry can have different resource configurations, leading to varying competitive positions. This diversity in resource endowments can explain differences in performance.
  • Resource immobility refers to the difficulty of transferring or replicating a firm’s unique resources and capabilities. Immobility can stem from factors like historical conditions, causal ambiguity (a lack of understanding of why a resource is valuable), and social complexity (interactions between resources and people).

4. Dynamic Capabilities:

  • Dynamic capabilities are a critical extension of the RBV. They emphasize a firm’s ability to adapt, reconfigure, and renew its resources and capabilities in response to changing market conditions and competitive pressures.
  • Firms with strong dynamic capabilities are better equipped to identify new opportunities, manage crises, and sustain their competitive advantage over time.

5. Value Chain Analysis:

  • The RBV often incorporates the concept of a value chain, where the firm’s activities are broken down into primary and support activities. By analyzing the value chain, firms can identify which resources and capabilities contribute most to their competitive advantage.

Significance of the Resource-Based View

The Resource-Based View has had a profound impact on strategic management and has several significant implications:

1. Shift in Strategic Focus:

  • The RBV shifted the strategic focus from industry analysis and generic competitive strategies to a more internal perspective. It highlighted that a firm’s internal resources and capabilities can be a more sustainable source of competitive advantage than external market factors.
  • This shift has led firms to invest in building and leveraging their unique resources and capabilities to create a competitive edge.

2. Resource-Based Strategy Formulation:

  • Firms now formulate strategies based on their resource endowments. They conduct resource audits to identify their strengths and weaknesses and develop strategies that leverage their distinctive resources to capture market opportunities.
  • Resource-based strategy formulation emphasizes a fit between a firm’s internal capabilities and the external environment.

3. Competitive Heterogeneity:

  • The RBV explains why firms in the same industry can exhibit varying levels of performance. By recognizing the heterogeneity in resource endowments, it offers insights into why some firms outperform their competitors.
  • This understanding of competitive heterogeneity has influenced merger and acquisition strategies, as firms seek to acquire valuable, rare, and inimitable resources from others.

4. Long-Term Orientation:

  • The RBV promotes a long-term orientation in strategic decision-making. Firms that focus on developing and nurturing their resources and capabilities over time are more likely to achieve sustained competitive advantage.
  • This perspective contrasts with short-term, market-driven strategies and encourages firms to invest in resource development and renewal.

5. Innovation and Adaptation:

  • Recognizing the importance of dynamic capabilities, the RBV encourages firms to continuously innovate and adapt to changing circumstances. It underscores the need for agility and responsiveness in today’s rapidly evolving business environment.
  • Firms that can reconfigure their resources and capabilities effectively are better positioned to seize emerging opportunities and overcome challenges.

Criticisms and Limitations

While the Resource-Based View has contributed significantly to strategic management, it is not without criticisms and limitations:

1. Tautological Argument:

  • Critics argue that the RBV’s VRIN criteria (valuable, rare, inimitable, non-substitutable) can be tautological, as firms with competitive advantages are often assumed to possess these qualities. This criticism questions the predictive power of the RBV.

2. Neglect of Industry Factors:

  • Some argue that the RBV’s exclusive focus on internal resources and capabilities can lead to an oversight of external industry factors that impact a firm’s competitive position. A comprehensive strategic analysis should consider both internal and external aspects.

3. Limited Guidance on Implementation:

  • While the RBV provides a framework for identifying resources and capabilities, it offers limited guidance on how to develop or reconfigure them. Firms may struggle with the practical implementation of resource-based strategies.

4. Dynamic Environment Challenges:

  • In fast-paced and highly dynamic environments, relying solely on existing resources and capabilities may not be sufficient. Firms may need to explore external partnerships, alliances, or acquisitions to stay competitive.

5. Measurement Difficulties:

  • Determining the exact value and rarity of resources and capabilities can be challenging, making it difficult for firms to assess their competitive advantage accurately.


The Resource-Based View (RBV) of the firm has significantly influenced the field of strategic management by emphasizing the critical role of a firm’s internal resources and capabilities in achieving sustainable competitive advantage. By focusing on the value, rarity, inimitability, and non-substitutability of resources, firms can develop strategies that leverage their unique strengths. However, the RBV is not without its limitations, and it should be used in conjunction with other strategic frameworks and analyses to formulate comprehensive and effective strategies. In today’s rapidly changing business landscape, the RBV’s emphasis on dynamic capabilities and adaptation remains relevant for firms striving to maintain their competitive edge.

Key Highlights of Resource-Based View:

  • Resource-Centric Strategy: Resource-Based View focuses on the strategic utilization of a company’s unique resources to gain competitive advantage.
  • Distinctive Resources: It emphasizes identifying resources that are valuable, rare, and difficult to imitate as sources of sustained advantage.
  • Tangible and Intangible Assets: The framework recognizes the significance of both tangible assets (physical resources) and intangible assets (knowledge, reputation) in shaping competitive strength.
  • Capabilities Matter: Beyond individual resources, the framework also highlights the importance of organizational capabilities, skills, and coordination.
  • Long-Term Advantage: By focusing on resources that competitors can’t easily replicate, companies can achieve sustainable, long-lasting competitive advantage.
  • Strategic Alignment: Resource-Based View aligns resource allocation with business strategies to maximize effectiveness and differentiation.
  • Innovation and Adaptation: It encourages companies to evolve and innovate using their unique capabilities and resources, enabling them to adapt to changing market dynamics.
  • Risk Mitigation: By leveraging distinctive resources, organizations can mitigate risks associated with competition and market uncertainties.
  • Challenges of Imitation: The framework recognizes the challenge posed by imitation of resources and capabilities, pushing companies to continually innovate.
  • Value Creation: It drives organizations to create value for customers by leveraging resources to meet unique needs and preferences.

Connected Agile & Lean Frameworks


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.


AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Andon System

The andon system alerts managerial, maintenance, or other staff of a production process problem. The alert itself can be activated manually with a button or pull cord, but it can also be activated automatically by production equipment. Most Andon boards utilize three colored lights similar to a traffic signal: green (no errors), yellow or amber (problem identified, or quality check needed), and red (production stopped due to unidentified issue).

Bimodal Portfolio Management

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

eXtreme Programming

eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Feature-Driven Development

Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

Gemba Walk

A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

GIST Planning

GIST Planning is a relatively easy and lightweight agile approach to product planning that favors autonomous working. GIST Planning is a lean and agile methodology that was created by former Google product manager Itamar Gilad. GIST Planning seeks to address this situation by creating lightweight plans that are responsive and adaptable to change. GIST Planning also improves team velocity, autonomy, and alignment by reducing the pervasive influence of management. It consists of four blocks: goals, ideas, step-projects, and tasks.

ICE Scoring

The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Minimum Viable Product

As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

Leaner MVP

A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else


Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.


Jidoka was first used in 1896 by Sakichi Toyoda, who invented a textile loom that would stop automatically when it encountered a defective thread. Jidoka is a Japanese term used in lean manufacturing. The term describes a scenario where machines cease operating without human intervention when a problem or defect is discovered.

PDCA Cycle

The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

Rational Unified Process

Rational unified process (RUP) is an agile software development methodology that breaks the project life cycle down into four distinct phases.

Rapid Application Development

RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle. These are the five stages of a retrospective analysis for effective Agile project management: set the stage, gather the data, generate insights, decide on the next steps, and close the retrospective.

Scaled Agile

Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.


The SMED (single minute exchange of die) method is a lean production framework to reduce waste and increase production efficiency. The SMED method is a framework for reducing the time associated with completing an equipment changeover.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.


Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.


Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Six Sigma

Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Stretch Objectives

Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.

Toyota Production System

The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Total Quality Management

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.


The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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