Internal Assessment Vs. External Assessment: a short comparison case to RBV and I/O view.
Internal Assessment Vs. External Assessment: a short comparison case to RBV and I/O view.
Some researchers emphasize the importance of the internal audit part of the strategic management process by comparing it to the external audit. Some refers to the other side of the view. However one cannot say with degree of certainty that either external or internal factors will always be more important in seeking competitive advantage. Understanding bothe external and internal factors and more importantly understanding the relationships among them will be the key to effective strategy formulation. Because all believe that those external and internal changes are continually changing through time. This is the essence and challenge of strategic management and will decides the survival of the firm in the market.
In evaluating strength, weakness, opportunities and threats, many analyst believe there are two views that can contribute to the evaluation process. Both views are the instruments of strategic management and a very important assessment to be done. They are Resource-Based View (RBV) and Industrial Organization (I/O) view. Let us try to review both of them shortly.
The Resource-Based View (RBV)
The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. The basic premise of the RBV is that the mix, type, amount, and nature of a firm’s internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage, according to RBV analysts. Managing strategically according to RBV involves developing and exploiting a firm’s unique resources and capabilities and continually maintaining and strengthening those resources.
Proponents of RBV will be determined by internal resources that can be grouped into three all-encompassing categories: Physical resources, human resources, and
Some researchers emphasize the importance of the internal audit part of the strategic management process by comparing it to the external audit. Some refers to the other side of the view. However one cannot say with degree of certainty that either external or internal factors will always be more important in seeking competitive advantage. Understanding bothe external and internal factors and more importantly understanding the relationships among them will be the key to effective strategy formulation. Because all believe that those external and internal changes are continually changing through time. This is the essence and challenge of strategic management and will decides the survival of the firm in the market.
In evaluating strength, weakness, opportunities and threats, many analyst believe there are two views that can contribute to the evaluation process. Both views are the instruments of strategic management and a very important assessment to be done. They are Resource-Based View (RBV) and Industrial Organization (I/O) view. Let us try to review both of them shortly.
The Resource-Based View (RBV)
The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. The basic premise of the RBV is that the mix, type, amount, and nature of a firm’s internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage, according to RBV analysts. Managing strategically according to RBV involves developing and exploiting a firm’s unique resources and capabilities and continually maintaining and strengthening those resources.
Proponents of RBV will be determined by internal resources that can be grouped into three all-encompassing categories: Physical resources, human resources, and