 Discuss the resource-based view of competitive advantage.

What are the characteristics of

resources that may yield sustainable competitive advantage? Describe the role that
Information systems can play in creating sustainable competitive advantage.

The Resource-based view (RBV) analyzes and describes the organizations' internal resources and
emphasizes resources and capabilities in formulating a strategy to achieve sustainable competitive
advantages. Resources may be recognized as inputs that enable firms to carry out their activities.
Internal resources and capabilities define strategic choices made by firms while competing in their
external business environment. According to RBV, not all the resources of a firm will be strategic.
Competitive advantage happens only when there are situations of resource heterogeneity and resource
immobility.

If a company wants to maintain a sustainable competitive advantage, it must control a set of available
resources with four key characteristics. These resources must be (1) valuable, (2) rare, (3) incompletely
imitable (difficult to imitate), and (4) nonsubstitutable. Having all four characteristics is key. Missing
value, no one cares about you have. Without rarity, you have nothing unique. Any seemingly
advantageous differences will be undercut if others can copy what you own or replace it with substitutes
(Information Systems, n.d.)

In any company, information systems can have a powerful impact on competitive advantage in terms of
cost or differentiation. The technology itself affects value activities or enables companies to gain a
competitive advantage by taking advantage of changes in the scope of competition (Porter & Millar,
1985).

 Briefly comment on Carr’s ‘It Doesn’t Matter’ argument, offer your thoughts.

The logic behind Carl's argument “IT Doesn’t Matter” is that you will not gain a competitive advantage
from information technology because competitors will quickly and easily copy it. Information technology
is a commodity, as he claims (Carr, 2003).

It appears to me that technological innovation can provide companies with a competitive advantage. No
organization can escape its influence. Companies such as Netflix, Zara, and Amazon have gained their
competitive advantage through information systems' unique use. The organizations must understand
what the trend is and what is occurring to respond or clarify. This can only be done quickly through
Information Systems. Ignoring Information Technology will only put organizations in trouble and leave
them behind their competitors.

References

Car, N. G. (2003). IT Doesn’t Matter. Harvard Business Review. Retrieved from https://hbr.org/2003/05/it-
doesnt-matter

Information Systems: A Manager’s Guide to Harnessing Technology. (n.d.). Libraries. Retrieved from
https://open.lib.umn.edu/informationsystems/chapter/2-1-introduction/#:~:text=The%20idea%20here
%20is%20that,%2C%20and%20(4)%20nonsubstitutable.

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 Madhani, P. M. (2009). Resource Based View (RBV) of Competitive Advantages: Importance, Issues and
Implications. SSRN. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1504379

Porter, M. E. & Millar, V. E. (1985). How Information Gives You Competitive Advantage. Harvard Business
Review. Retrieved from https://hbr.org/1985/07/how-information-gives-you-competitive-
advantage#:~:text=In%20any%20company%2C%20information%20technology,Lowering%20cost.

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