Question

1.what are assumptions of the resource based view. example

2.When is imitability more likely with the product differentiation. example

3.explain the differences between resource-based view and SCP model.example

4.how do you make profits from the Porter 5 forces. example.

Answer 1

1) Resource Based View (RBV) can be defined as a strategic way to firms adopt for competitive adavantage . Now , what is competitive advantage? Competitive advantage - In simple words, this is a technique or method by which a firm can be the king of the competitive market. Through this resource based view, firms is able to identify, recognize and allocate valuable resources. Valuable resources are key factor for sustainability of any organization. resources can be mainly divided into two : tangible and Intangible

Assumptions of resource based view

The two main criticl assumptions of resource based view model is that resources must be heterogeneous as well as immobile .

• Heterogeneous : This is the foremost assumptions. This means that the capabilities and skills available in one firm differs from another, it cannot be same how hard one tries. The understanding, creativity etc of each employee differ from one another inside and outside firm. Had it been that there were possibility of such similarity then this competition and rivalry or strategy would have gone waste or say meaningless. In other words, it would represent a perfect competitive market which in real world doesnot exist. Here, comes the need of resource based view and thus different firms employ various strategies to hold their place in this competitive world. For example : lets take example of two grocery stores which has gone online during this crisis . For this i choose two indian marts big bazaar and dmart . Both are competing with each other by providing various offers online which makes grocery available at doorstep foollowing the safety measures.
• Immobile : This is the second assumption of resource based view model. This assumption states that the resources are not transferable between companies atleast in a short run. As a result of this companies keep competition on and cannot implement same strategies as the competant company in market.Example of immobile resources can be brand, copyright, trademark, domain etc. In other words, intagible or intellectual assets are best example of this kind.

2) Product differentiation: It is nothing but differentiating ones products and services from other companies. This involves adding creativity and increasing utility of products inorder to attract customers.

Imitability: This is in simple words, the ability to imitate somebody , when it comes to products , it is copying other firms example.

Imitation in product differentiation happens when customers switch from one product to another. this happens mostly with products in same line. For example : toothpaste companies. For ellaborating, i am choosing again two indian brands colgate and pepsodent . Both are in same product line and have introduced the same variety of tooth paste most of the time. Hence forth, we can say imitation happens when products are at same line and also a part of strategies in order to conquer market position or at times to maintain its position in market.

3) Resource based view and SCP model are both startegies but different in goals .

• Resource based view focuses on identifying valuable resource whereas SCP model is performance checking model.
• One aims at making performances and the second one evaluates performance.
• SCP is based on cause and effect whereas RBV is based on identifying, recognizing and allocating resources.
• RBV explains the relation between resource and the firm whereas in SCP model it is the relation between firm and its performance.
• RBV model is based out of two assumptions whereas SCP model is based out of three aspects .