The Resource Underpinnings of Competitive

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JOURNAL OF STRATEGIC MARKETING 13 93–116 (JUNE 2005)

The resource underpinnings of competitive positions
GRAHAM HOOLEY* AND GORDON GREENLEY

Aston Business School, Aston University, Birmingham B4 7ET, UK

Competitive positioning is central to market-focussed management, comprising the choice of target market the firm will operate in, and how it will compete in that market. Positioning decisions are complex and require the firm to find a profitable match between market requirements and firm ability to satisfy them. Equally important, however, is the longer term sustainability of any position created in the market place. Drawing on theory from the strategic management and marketing domains the authors argue that the competitive position achieved is a key marketing resource with the potential to generate sustainable competitive advantage. The paper examines alternative competitive positions, the marketing resources necessary to underpin them, and how they are defended against competitor imitation or encroachment. Some positions are found to be inherently more defensible than others. KEYWORDS: Competitive positioning; marketing resources; inimitability

INTRODUCTION The resource-based view of strategy has increasingly come to dominate the strategic management literature over the last two decades (Collis and Montgomery, 1995; Wernerfelt, 1995). Originating in the field of economics (Penrose, 1959) and developed by management theorists (Wernerfelt, 1984; Barney, 1991), the central importance of resources as an explanation of competitive advantage creation has been embraced and extended by marketing scholars ¨ (Bharadwaj, Varadarajan and Fahey, 1993; Day, 1994; Hunt and Morgan, 1996; Hooley, Moller and Broderick 1998; Srivastava, Shervani and Fahy, 1998; Fahy and Smithee, 1999). The resource-based view (RBV) of the firm proposes that competitive advantage (and subsequently performance) is dependent on historically developed resource endowments. Its development can be traced back over four decades (see Penrose, 1959) but has received renewed impetus in recent years (see Barney, 1991; Grant, 1991, 1995; Wernerfelt, 1995; Amit and Shoemaker, 1993; Henderson and Mitchell, 1997; Combs and Ketchen, 1999; Cockburn, Henderson and Stern, 2000; Priem and Butler, 2001). Resource-based theorists concentrate on how firms can create sustainable competitive advantage in their markets, and conclude that this is brought about through the possession and deployment of distinct resources that both create value for customers and are resistant to imitation by competitors (Mahoney and Pandian, 1992). Corresponding author: Email: g.j.hooley@aston.ac.uk

Journal of Strategic Marketing ISSN 0965–254X print/ISSN 1466–4488 online # 2005 Taylor & Francis Group Ltd http://www.tandf.co.uk/journals DOI: 10.1080/09652540500082968

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Within marketing the competitive positioning perspective similarly recognizes that for resources to be leveraged for economic benefit requires their application in the market place (Hooley, Moller and Broderick, 1998). At the same time it also recognizes that if that application ¨ is to be sustainable in the face of competition, then competitive advantage must be built on distinctive resources and capabilities (Hamel and Prahalad, 1994; Webster, 1994) and must be actively protected against competitor imitation or encroachment. This paper examines the alternative competitive positions adopted by firms and the idiosyncratic resources that are important in underpinning those positions. The underlying research question addressed is: What resources are necessary to achieve and sustain specific competitive positions in today’s market place?

To date there has been little empirical research into the resources required to underpin alternative competitive positions and this research attempts to begin to redress the balance. The paper is organized as follows. First, the theoretical foundations of both...
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