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BUS 5114 Unit 5 Discussion Assignment
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A guide to assignment on resources based view of competitive advantage. The role of information technology on creating sustainable competitive advantage.
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Discuss the resource-based view of competitive advantage. What are the characteristics ofresources that may yield sustainable competitive advantage? Describe the role that
Information systems can play in creating sustainable competitive advantage.
The resource-based view (RBV) of competitive advantage argues that how a firm utilizes its
internal resources will determine its long-term success (Grant, 1991). Hence, the firm should find
ways to quantify its resources, find new ways to use its resources, and incorporate innovation to
achieve its corporate objective. The theory further adds that innovation is a key factor to acquire
and use resources efficiently to provide a product or service that is difficult to substitute or
imitate (Mohan, 2021).
This view of focusing on achieving long-term sustainability and competitive advantages have
been examined by various researchers (Grant, 1991). Firms have to perform exhaustive resources
analysis, calculate resource allocation, and implement cross-function usage of resources to
achieve competitive advantage using this model. Firms need to understand the potential of their
workforce and capitalize on that.
RBV model suggests that for a resource to yield a sustainable competitive advantage it needs to
have certain characteristics. These characteristics include rarity, imitability, and value (Mohan,
2021). If a firm acquires rare resources it can utilize them to sustain its competitive advantage.
However, if other firms can mimic these resources or products their value will decrease.
Hence, the cost to mimic a resource should be high to provide a sustainable competitive
advantage for the firm. Additionally, these resources should add tangible value to the company.
This could be achieved by using these resources to exploit new markets or by using these
resources to reduce cost in turn increasing profits.
Information system plays a significant role in utilizing resources to gain a long-term competitive
advantage. Commonly, there are four strategies for a firm to use information technology and
systems to achieve sustainable competitive advantage (Mohan, 2021). The first is by using an
information system to lower operation costs using an efficient system to gain customers' data and
provide customizable services.
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