An Evaluation of Apple's Competitive Advantage Using the Resource-Based View (Rbv)

The early 1980’s seen a period of evolution in strategic management, the resource-based view was gaining acceptance, with the intensification of global foreign competition. In the same period, the more established theory of competitive advantage that is primarily determined by external environmental factors reached maturity with Michael Porter’s five forces model. Porter’s five forces framework provided a much more specific basis for systematic analysis of industry attractiveness, focusing on just the economic environment and neglecting the environments it is associated with, such as the technological, political, legal, all of which affect the performance of the firm (Nixon et al,

The internal environment will be observed using the Resource Based View (RBV) theory, which looks at creating a competitive advantage through resources and capabilities. Resources and capabilities are a collection of tangible and intangible assets (Barney et al., 2011). The link between resources and capabilities allows a company to express their strategy, which creates a competitive advantage (Grant, 2016). This section focuses both on Cobra and Molson Coors, due to a lack of information available for Cobra. Molson Coors bought a majority stake in Cobra in 2009 (Pinto, 2011).

Why might intangible resources like human capital and intellectual assets be a more likely source of sustainable competitive advantage than tangible resources? These create ambiguous resources that are difficult to duplicate. Competitors will have a hard time re-creating the particular resources that deliver the advantage.

Apple Inc. designs, manufactures, and sells personal computers, computer accessories and computer related software. The company also offers peripherals, networking solutions and other related services. Additionally, Apple computers designs, builds, and markets a wide array of portable digital music players, telecommunication devices alongside related accessories and services (Cameron & Quinn 2011, p 288). Apple Inc owes its recent success in the highly competitive computer industry to its situation, marketing strategy and product mix that have gone a long way market the Apple brand as leader of good quality and satisfactory experience. The success of the company borrows draws a

For a business to be successful and have a competitive advantage, it is important to evaluate the company’s resources and capabilities (Pitt & Koufopoulos, 2012). Resources in a company are the productive assets owned (tangible or intangible) whereas capabilities are what the company can do with this (Grant, 2010). “Establishing competitive

As we listen to Collis’s perception of competitive advantage - ‘Competitive advantage, whatever its source, ultimately can be attributed to the ownership of a valuable resource that enables the company to perform activities better or more cheaply than competitors.’ (David J Collis, Cynthia A Montgomery. Harvard Business Review. Boston: Jul/Aug 2008. Vol. 86, Iss. 7,8; pg. 140) - we can see that these tangible assets don’t really enable Costa to perform better than its prime competitors. It is therefore absolutely crucial, that the resources Costa utilizes respect Barney’s statement in order to enable Costa to gain competitive advantage; a resource must be: (1) Valuable in a way that it enables the company to conceive and implement strategies that develop its efficiency, (2) Rare, (3) Imperfectly imitable, and (4) Non-Substitutable (Jay Barney, (1991), “Firm resources and sustained

Through an internal environment analysis, companies can identify and understand their own unique resources, capabilities, and competencies that are required for their sustainable competitive advantage. Resources, capabilities, and core competencies are the foundation of competitive advantage. There is no competitive advantages are permanently sustainable in any companies, so they have to consist on their current advantages and develop new advantages by internally understanding and analyzing their resources and capabilities. Competitors have their own unique resources, capabilities, and core competencies to create values for their customers. Both tangible and intangible resources, which include individual, social and organizational phenomena, are combined to generate capabilities. In turn, company’s capabilities are used to build core competencies. Also, core competencies are as a source of competitive advantage for a company to win in the competitive market.

In order to achieve a competitive advantage, an organization must have resources, competencies, and capabilities. Resources are what an organization utilizes to create value in the organization. Resources are imperative to the organizations value and are tangible and intangible. Tangible resources are financial, physical, and labor. “Robert Kaplan and David Norton point out that unlike financial and physical resources, intangible resources are hard for competitors to imitate, making them a powerful source of sustainable competitive advantage.” (Ginter, Duncan and Swayne 138) Competitive advantage comes from the organizations resources. The competitive advantage the organization has is its ability to provide quality services than services

Mr. Porter makes the essential point that competitive advantages and the differences they create in firm performance are often strongly related to the resources firms hold and how they are managed. Resources are the foundation for strategy, and unique bundles of resources generate competitive advantages that lead to wealth creation (Bush, Greene, &Hart, 2001).

Apple was unable to maintain any strategy over this period since every CEO inconsistently changed the business model and strategy of Apple. Apple’s most important resources and capabilities are Steve Jobs, and the integrated system of hardware and software that the firm has developed and successfully marketed to derive value. Steve brought Apple back to tremendous success following a decline in relevance and heads the continued creation of billions of dollars of value. While Apple’s designers, programmers, and engineers each represent key resources, the ability of the firm to exploit their abilities to create their entire software/hardware ecosystem is the firm’s key capability.

Value, rarity, and can be obtained, are used to characterize resources that contribute to initial competitive advantage. To sustained competitive advantages, the resources must be imitable, imperfectly mobile, and have low substitutability. Imitability is, whether other will be allowed to imitate or copy the resources. Mobility is the easiness of an organization to acquire the resources to imitate. Example of it, are hardware and software that are easily obtained. Finally, substitutability is the ability of others to make use of substitute resource.

What is essential to point out is that there is a progressive relationship between these four attributes. First of all, that a resource is valuable is enable firms to survive; secondly, when the resource is rare, it will provide a short-run competitive advantage for the firm; however, if the resource is easily imitated, the advantages will disappear. Therefore the inimitable one is considerately significant; finally, there is no substitute for such a resource. Only when these four attributes are

Resource Based View (RBV) theorists argue that information technology (IT) resources can be used today in an online environment to enable a firm to improve efficiency regardless of whether mimicked by competitors, or may yield performance impacts unique to a firm relative to its’ competitors.” (Melville, Kraemer & Gurbaxani 2004) A major factor in RBV and enhancing value creation better than a company’s competitors is that of competitive heterogeneity. This refers to enduring and systematic performance differences among relatively close rivals. (Hoopes, Madsen & Walker, 2003) Resources are the tangible and intangible assets of a firm that can be used in the value creation process and the RBV consists of six conditions necessary for a firm to confer a sustainable competitive advantage (Melville, Kraemer & Gurbaxani 2004) and are as follows.

Overview Executive Summary............................................................................................................. 1 Apple Inc. Strategy Facts: Scope, Generic Competitive Strategy, and Value Creation ...... 2

1) Barney, J., (1991). Firm Resources and Sustained Competitive Advantage, Journal of Management, vol. 17 (1991), no. 1, pp. 99–120.