Question

What are the differences between tangible and intangible resources? Why is it important for decision makers to understand these differences?

Answer 1

Tangible Resources are those which have physical existence. Tangible assets such as Land, Plant & Machinery, and all the assets. Intangible resources are those which does not have physical existence such as goodwill, trademark, loyalty etc.

Tangible assets can be analysed by the competitors but it is almost impossible for the competitors to copy and imitate the intangible assets. since, it is deeply rooted with the company. For example the Brand Loyalty cannot be copied by any of the competitors.

For decision makers understanding these assets is important as these resources define the capabilities of the firm. These Capabilities are the source of the firms core competencies. The Intangible assets are more important for the firm as it has significant impact on the consumers perception towards the company. Other companies can replicate everything asset or strategy but they cannot copy the reputation of the firm.

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