MGMT4210 4

a set of companies with similar strategy within an industry

model that explains intraindustry performance difference by clustering firms into groups depending on strategic dimensions

• competitive rivalry is strongest among the same group
• PESTEL and 5F affect different groups differently
• some groups have better performance on some but not all metrics

• assets and capabilities are collectively known as resources
• competitive advantage and a high valuation of the firm often comes from the intangible resource of the firm
• origins of persistent differences in performance comes from resource heterogeneity and resource immobility(cannot imitate)

what turns resources into competitive advantage

• valuable - no effect on performance
• rare - competitive parity with other firms
• costly to imitate - temporary advantage
• organized- unfulfilled potential

• path dependence
• causal ambiguity
• social complexity

• time compression diseconomies
• cumulative advantages
• interdependencies

• while RBV focus on resources>competitive advantage, VC focuses on specific activities
• breaks down perceived value added vs cost for each VC activity