Resource-Based Theory of Company Strategy

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attempt to look inside the company and draw from the companies resources. In contrast, the resource-based perspective highlights the need for a fit between the external market context which affects the company on a daily basis and its internal capabilities.
Another model which is currently being replaced by the resource based model is the Input / Output Model (I/O model). The I/O model is the fruit of the production line mindset of the last century. The organization needed to identify those resources which were needed as input in order to create the specified output. "Instead of focusing on the accumulation of resources necessary to implement the strategy dictated by conditions and constraints in the external environment (I/O model), the resource-based view suggests that a firm's unique resources and capabilities provide the basis for a strategy. The strategy chosen should allow the firm to best exploits its core competencies relative to opportunities in the external ...

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the competitive advantage. Competitive advantage is the only means by which companies in competitive markets can earn economic rent. The objective of a company is to increase its economic rent, rather than limit it's focus just to profit. "A company which increases its profits but not its economic rent - as through investments or acquisitions which yield less than the cost of capital - destroys value." (Markides, 1999)
Each organization is a collection of unique resources and capabilities that provides the basis for its strategy. In the 21st-century post modern and highly competitive landscape, a firm is a collection of evolving capabilities that is managed dynamically in pursuit of ...

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