Competitive Advantage and Industry Capabilities

Recently, numerous strategy scholars have revitalized the concern with the resources and capabilities side of firms. This trend often referred to as the “resource-based perspective” (RBP), has led to a much improved understanding of firms’ diversification strategies (Montgomery and Wernerfelt 19881 Montgomery and Hariharan 1991) and of the underlying conditions for sustained competitive advantage (Barney 1991 Peteraf 1993). Furthermore, the perhaps more dynamic issue of resource- accumulation processes has been treated in some detail (Dierickx and Cool 1989). In terms of the SWOT framework—the overall idea that strategy is a matter of obtaining fit between the Strengths of the firm and the Opportunities of the environment, while simultaneously safeguarding the Weaknesses of the firm from the Threats of that environment—the RBP may be said to have investigated and added further analytical content to the “Strength-Weaknesses” part.