BUS602: Marketing Management

Distinctive competencies, were the conceptual precursor concept to resources and capabilities, which is to say, the elements that belong to or are developed by the company and allow it to generate greater incomes. This approach defines the company as a set of productive resources that can be physical, intangible or organizational.

The theory of Resources and Capabilities, known as RBV (Resource Based View), focuses on the resources and capabilities controlled by the firm as the elements that confer competitive advantage.

Resources are the stock of available factors that the company controls. These become final products or services, using a wide range of other assets and mechanisms such as technology, information systems, management systems, incentive systems and mutual trust between managers and employees. The term capabilities refers to the possibility of using resources in combination, implementing organizational processes to create the desired effect of having information, tangible or intangible elements, and specific business processes that have been developed over time, as well as complex interactions among available resources.

Resources and capabilities are not strategic and fundamental unless they engender superior performance. Grant refers to three conditions that can be considered strategic: (1) establishing a competitive advantage, (2) sustaining the competitive advantage, and (3) appropriating the returns of the competitive advantage. The advantages achieved by the resources and capabilities, depend not only on a company's ability to establish a competitive advantage, but also on how long the company can sustain that advantage. Durability is conditioned upon the possibility of imitability. Resources and capabilities are imitable if they are both transferable and replicable.

Although the RBV has received criticism for insufficiently explaining business performance, it is indeed a driver of performance as it enables the development of capabilities.