Resource Based View (RBV) of Competitive Advantages : Importance, Issues and Implications

The Resource based view (RBV) analyzes and interpret internal resources of the organizations and emphasizes resources and capabilities in formulating strategy to achieve sustainable competitive advantages. Resources may be considered as inputs that enable firms to carry out its activities. Internal resources and capabilities determine strategic choices made by firms while competing in its external business environment. According to RBV, not all the resources of firm will be strategic resources. Competitive advantage occurs only when there is a situation of resource heterogeneity (different resources across firms) and resource immobility (the inability of competing firms to obtain resources from other firms)