The Resource Based View and Sustainable Competitive Advantage: the Case of Financial Service Firm

Topics: Investment, Financial services, Balance sheet Pages: 30 (9370 words) Published: March 3, 2013
The resource-based view and sustainable competitive advantage: the case of a financial services firm Val Clulow School of Business, Swinburne University of Technology, Hawthorn, Australia Julie Gerstman School of Business, Swinburne University of Technology, Hawthorn, Australia Carol Barry School of Business, Swinburne University of Technology, Hawthorn, Australia


Resources, Competitive advantage, Financial services, Intangible assets

The study of sustainable competitive advantage (SCA) within particular service industries was encouraged as far back as 1993. Bharadwaj et al. (1993, p. 83) proposed a conceptual model which attempted to integrate SCA issues from the fields of marketing, strategic management and industrial organization economics in an effort to explore ``. . . the implications of the distinctive characteristics of service industries and firms for achieving SCA''. They noted that organizational analysis ``. . . based on information internal to the firm and not available to the competition . . .'' (Bharadwaj et al., 1993, p. 96) has greater potential to generate superior advantage than environmental analysis, which is available to all competitors. The role of a firm's key resources in conferring an SCA has been developed in the ``resource-based (RBV) view of the firm''. A model developed by Fahy (2000) provides an integrated view of the resource-based theory and offers a framework upon which empirical research can build. The financial services industry in Australia is experiencing rapid growth and diversification, is highly competitive and offers potential to provide further insight on SCA from a closer examination of information internal to the firm. Financial services play a significant role in the Australian economy, providing a growing share of total industry output and employment. According to the Reserve Bank of Australia (2002), total daily turnover in all financial markets in Australia in 2000-2001 averaged A$170 billion, an increase of 11 percent over the previous year, and in the past 15 years growth has averaged over 20 percent per annum. There are a number of The Emerald Research Register for this journal is available at


The resource-based view (RBV) of the firm is a theory that has been explored in academic literature as a means of explaining competitive advantage and, in turn, superior performance amongst firms. In this paper it is argued that the model developed by Fahy offers a concise picture of the nature and role of key resources in strategic management but this picture needs further empirical development. A research approach based on a face-to face interview is used to explore the process by which a high-performing firm in the financial services industry in Australia identifies, develops, deploys and protects its key intangible assets and capabilities in sustaining competitive advantage.

Journal of European Industrial Training 27/5 [2003] 220-232 # MCB UP Limited [ISSN 0309-0590] [DOI 10.1108/03090590310469605]

markets within the industry including the bond and money markets, foreign exchange market, stock market and funds management market. The funds management market in Australia has grown rapidly over the past decade as a result of growth in superannuation contributions and increasing stock market participation, with an estimated A$650 billion of funds under management. The sector is broadly divided into collective investment institutions (retail) and investment managers (wholesale). Life insurance companies, public unit trusts, pension funds, friendly societies and cash management trusts are collective investment institutions which pool the funds of many small investors and use them to buy a range of assets including equities, short- and long-term debt securities and property. Investment managers are specialists employed to manage and invest for both pooled funds and individual clients on a...
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