Compare Io Model and Rbv
Table of Contents
1. Strengths and Weaknesses of I/O model and RBV … 3 2. COMMONNANDDIFFERINGTHEMES…………………………… 4 3. STRATEGY FOR 21ST CENTURY………………………………… 6 4. CONCLUSION…………………………….. ………………………… 7 REFERENCE LIST…………………………………………………… 8
1. Strengths and Weaknesses of I/O model and RBV BOTH OF THE INDUSTRIAL ORGANIZATION THEORY AND RESOURCE-BASED THEORY ARE SIGNIFICANCE FOR STRATEGY MANAGEMENT. HOWEVER, NO THEORY IS PERFECT, BELOW WOULD SHOW THE STRENGTH AND WEAKNESS OF I/O MODEL AND RBV.
Strength of I/O model
The core of I/O model’s framework is based on the consuetude of industrial organization which is there are five force in all competitive industries. The five forces have great significance in both industry attractiveness and strategic planning. In addition, strategic group model provides a basic approach to evaluate the firm’s external competitive position and identify the firm’s weaknesses and strengths.
Weakness of I/O Model
First, the industrial organization research is framed by the public policy. It never considers the implications for business strategy. In addition, industrial organization is engaged in industries and supposes all the firms in the industries are essentially the same. Nevertheless, the strategic planning is interested in ways to create unique strategies. Finally, I/O assumes away conduct (strategy) as relevant to affecting performance while strategists have methods to alter industry structure to a way which is good for them.
Strength of RBV
Fahy (200) argued that the primary contribution of the RBV of the firm is a theory of competitive advantage. The RBV focus on the resources in the firms and explains how the resources link to the strategies which the firms pursue. RBV can be used to assess the competitive potential of the different strategic alternatives firms face. The resource based theory would encourage the firms to exploit unique resources when they are aware of
1. Strengths and Weaknesses of I/O model and RBV … 3 2. COMMONNANDDIFFERINGTHEMES…………………………… 4 3. STRATEGY FOR 21ST CENTURY………………………………… 6 4. CONCLUSION…………………………….. ………………………… 7 REFERENCE LIST…………………………………………………… 8
1. Strengths and Weaknesses of I/O model and RBV BOTH OF THE INDUSTRIAL ORGANIZATION THEORY AND RESOURCE-BASED THEORY ARE SIGNIFICANCE FOR STRATEGY MANAGEMENT. HOWEVER, NO THEORY IS PERFECT, BELOW WOULD SHOW THE STRENGTH AND WEAKNESS OF I/O MODEL AND RBV.
Strength of I/O model
The core of I/O model’s framework is based on the consuetude of industrial organization which is there are five force in all competitive industries. The five forces have great significance in both industry attractiveness and strategic planning. In addition, strategic group model provides a basic approach to evaluate the firm’s external competitive position and identify the firm’s weaknesses and strengths.
Weakness of I/O Model
First, the industrial organization research is framed by the public policy. It never considers the implications for business strategy. In addition, industrial organization is engaged in industries and supposes all the firms in the industries are essentially the same. Nevertheless, the strategic planning is interested in ways to create unique strategies. Finally, I/O assumes away conduct (strategy) as relevant to affecting performance while strategists have methods to alter industry structure to a way which is good for them.
Strength of RBV
Fahy (200) argued that the primary contribution of the RBV of the firm is a theory of competitive advantage. The RBV focus on the resources in the firms and explains how the resources link to the strategies which the firms pursue. RBV can be used to assess the competitive potential of the different strategic alternatives firms face. The resource based theory would encourage the firms to exploit unique resources when they are aware of
References: 1. Michael E. Porter. (1983) Industrial Organization and the Evolution of Concepts for Strategic Planning: The New Learning, Managerial and Decision Economics, Vol. 4, No. 3, pp. 172-180 2 3. Michael E. Porter. (1981) The Contributions of Industrial Organization to Strategic Management, The Academy of Management Review, Vol. 6, No. 4 pg. 609-620 4 5. Liran Einav and Jonathan Levin. (2010) Empirical Industrial Organization: A Progress Report, Journal of Economic Perspectives—Volume 24, Number 2—Pages 145–162 6 7. Xavier Gilbert and Peter Lorange. (1994) National Approaches To Strategic Management - A Resource-based Perspective, International Business Review Vol 10. TOKUDA Akio. (2005) The Critical Assessment of the Resource-Based View of Strategic Management:The Source of Heterogeneity of the Firm, RITSUMEIKAN INTERNATIONAL AFFAIRS Vol. No.3, pp.125-150 11 12. John Fahy. (2002), A resource-based analysis of sustainable competitive advantage in a global environmentInternational , International Business Review 11, pg57–78 13