Question

Intangible resources or capabilities may be a good basis for creating a competitive advantage because

• intangible resources or capabilities are generally rare.

• intangible resource or capabilities are generally easily observed.

• intangible resources or capabilities are generally sticky to the firm.

• intangible resources or capabilities are generally easily transferred.

• intangible resources or capabilities are generally easily acquired.

Answer 1

Intangible resources or capabilities may be a good basis for creating a competitive advantage because intangible resources or capabilities are generally rare.

A resource is rare if it is not widely possessed by other competitors , i.e., it is uncommon.

Intangible resources are do not have any physical existence , they are unobservable and difficult for the competitors to understand. For example, brand recognition, patents, trademarks, copyrights,etc.

The resources which are valuable, rare and costly to imitate are a good basis for creating temporary competitive advantage.

To gain a sustained competitive advantage , resources and capabilities must be valuable , rare , costly to imitate and organised.

Unlike tangible resources(plant, machinery,etc)which are easily observable and acquirable , the intangible resources are less visible and thus more difficult to imitate, purchase or substitute .They are rare.Thus, they may be good basis for creating competitive advantage ( temporary or sustained).