The article discusses the managerial implications of adopting a resource-based view in strategic management. It argues that companies should diversify based on their existing capabilities rather than the markets they currently serve. Firms should also focus on creating value for customers based on their resources rather than the products they offer. Additionally, competitive advantages are often explained by human resources, so integrating human resource management practices with strategic management is important for developing and sustaining advantages. When imitating competitors, companies should start by analyzing market strategies and processes, and only acquire new resources if needed to implement imitation.

1. Strategic Direction
Emerald Article: Resource-based competitiveness: managerial implications
of the resource-based view
Jim Andersén
Article information:
To cite this document: Jim Andersén, (2010),"Resource-based competitiveness: managerial implications of the resource-based view",
Strategic Direction, Vol. 26 Iss: 5 pp. 3 - 5
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http://dx.doi.org/10.1108/02580541011035375
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2. Viewpoint
Resource-based competitiveness: managerial
implications of the resource-based view
´
Jim Andersen
Introduction
Strategic analysis is a key feature of strategic management. In strategic management
research, there has been a shift from focusing on firms’ products to focusing on internal
factors in terms of resources and capabilities (Barney, 1991). Thus, according to some
scholars previous models such as isolated (product) market analysis and Porter’s (1980) five
forces framework are obsolete to some extent. Instead, strategic analysis based on resource
´
Jim Andersen is an and capability approaches is more suitable for today’s business environments. This paper
Assistant Professor at the
will address the practical implications of the resource-based view, and discuss how
Swedish Business School
¨
companies can benefit from adapting a more resource-based approach in their strategic
at Orebro University,
¨ management practices.
Orebro, Sweden.
Diversification
The rationale for resource-based diversification differs from diversification based on a
traditional (product) market approach. In the marketing literature (see, for example, the
discussions concerning the concept of ‘‘new service logic’’), companies are advised to take
the need they satisfy among their customers as a point of departure when diversifying their
business. Grant (1991) uses a rail-road building company as an example. If this company is
to diversify according to the market-based logic, it would focus on the service it provides to
the end-customer (i.e. transportation) and thereby diversify into other areas of the
transportation industry by, for example, investing in the airline industry or the car rental
industry. From resource-based rationale, however, this company would take its production
capability as the point of departure (i.e. the production and logistics capabilities), and
diversify into building, for example, oil and gas pipelines (Grant, 1991). Thus,
resource-influenced diversification is based on resource relatedness (i.e. diversify into a
market in which you can apply your existing resources), whereas market-influenced
diversification is based on market relatedness (i.e. diversify into markets where you have
previous knowledge of market conditions, etc.).
Compete on resources, not products
Adapting a resource-based approach towards management requires a shift from focusing
on products and product development to concentrating on resources and resource
development. Thus, the main strategic focus of a company should not be on standardized
products or different product offerings, but on how the company can create maximum value
¨
for its customers based on its resources (Gronroos, 1996). By adapting a resource-based
approach, the main role of the sales personnel should not be to promote specific products to
customers. Instead, the sales function should match the needs of the customers and the
resources of the company. In order to apply contemporary management and marketing
practices such as mass customization, one-to-one marketing, and customer-driven
organizations, a resource-based approach is essential. Product development is, of
course, still important. However, without the continuous development of resources, in terms
DOI 10.1108/02580541011035375 VOL. 26 NO. 5 2010, pp. 3-5, Q Emerald Group Publishing Limited, ISSN 0258-0543 j STRATEGIC DIRECTION j PAGE 3

3. of knowledge and company capabilities, the resources of firms will become obsolete. Thus,
without the relevant capabilities, successful product development would be impossible.
The importance of SHRM
When product life-cycle times continue to decrease, costly efforts to protect resources
(through patents, copyright, etc.) become less attractive. Resource-based strategic
management focuses on developing hindrances to imitation of resources instead of
protecting products. Thus, building strong relationships with employees and other key
human resources is essential in today’s dynamic business environment. Linking of human
resource management practices to the strategic direction of the firm is crucial, and the
emergence of the field of SHRM (strategic human resource management) reflects this notion
´
(Andersen, 2007a). Thus, SHRM practices have two main functions:
1. to enhance organizational learning, thereby developing strategic resources in terms of
different capabilities (i.e. to develop competitive advantages); and
2. to implement employee retention strategies in order to make the competitive advantage
sustainable.
Imitation of competitive advantages
All companies cannot concentrate on being innovative and entrepreneurial. A more
cost-effective strategy would be to closely monitor the actions of competitors in order to
swiftly imitate successful actions, without taking the risks associated with being the first to
act. In the marketing literature, this is sometimes referred to as ‘‘second-mover advantages’’.
However, from a resource-based approach these actions do not necessarily have to be
restricted to actions undertaken in the product market (for example, by being the first
company to launch a new product or the first company to enter a new market). Instead,
imitation of business processes and resources can also generate competitive advantages.
´
Taking into consideration resources and processes, Andersen (2007b) proposed a
sequential model for the imitation of competitive advantages. In order to imitate the best in
the industry, companies are advised to initially analyze the possibility of imitating the market
strategy. If this requires new business processes, the next step would obviously be to
attempt to imitate these processes. Finally, if the processes require new resources and/or
capabilities, companies would have to assess the possibility of acquiring similar resources.
For example, let us assume that the market leader within an industry has gained this position
by a differentiation strategy in terms of high-quality products. If the imitator is able to
produce similar products, it will only have to adapt a new market strategy by communicating
this information and/or by focusing on the most profitable markets. If the imitator is not
producing high-quality products, the next step would be to consider re-orienting its business
processes by focusing more on quality management. If the company does not possess the
resources necessary to implement more quality-oriented processes, it will have to develop
or invest in these resources.
Conclusions
This article can be summarized by these managerial implications:
B Diversify based on what you can do (i.e. your capabilities) and not on the markets you are
currently serving.
‘‘ Diversify based on what you can do (i.e. your capabilities) and
not on the markets you are currently serving. ’’
j j
PAGE 4 STRATEGIC DIRECTION VOL. 26 NO. 5 2010

4. ‘‘ Focus on how you can create value together with your
customers, based on your resources and not on what you can
offer to your customers in terms of a set of products. ’’
B Focus on how you can create value together with your customers, based on your
resources and not on what you can offer to your customers in terms of a set of products.
B Competitive advantages can almost always be explained by human resources. Thus,
integration of HRM practices with strategic management is essential in order to develop
and sustain competitive advantages.
B Resources are generally complex in terms of imitation or acquisition. Thus, when imitating
successful competitors, begin by analyzing market strategies and processes. If these
practices are not possible to imitate without new resources, then determine the possibility
of acquiring these resources.
References
´
Andersen, J. (2007a), ‘‘A holistic approach to acquisition of strategic resources’’, Journal of European
Industrial Training, Vol. 31 No. 8, pp. 660-77.
´
Andersen, J. (2007b), ‘‘How and what to imitate? A sequential model for the imitation of competitive
advantages’’, Strategic Change, Vol. 16 No. 6, pp. 271-9.
Barney, J.B. (1991), ‘‘Firm resources and sustained competitive advantages’’, Journal of Management,
Vol. 17 No. 1, pp. 99-120.
Grant, R.M. (1991), ‘‘The resource-based theory of competitive advantage: implications for strategy
formulation’’, California Management Review, Vol. 33 No. 3, pp. 114-35.
¨
Gronroos, C. (1996), ‘‘Relationship marketing: strategic and tactical implications’’, Management
Decision, Vol. 34 No. 3, pp. 5-14.
Porter, M.E. (1980), Competitive Strategy, Free Press, New York, NY.
About the author
´ ¨
Jim Andersen is an Assistant Professor at the Swedish Business School at Orebro University,
Sweden. His research focuses on strategic management, in particular resource-based
´
theory and entrepreneurial strategies. Jim Andersen can be contacted at: jim.andersen@
oru.se
j j
VOL. 26 NO. 5 2010 STRATEGIC DIRECTION PAGE 5