1.

Using examples and frameworks, critically compare and contrast the effectiveness

of the resource-based view and competitive positioning approaches to formulating

business strategy.

The resource-based view (RBV) and competitive positioning strategies have proven to be the

popular strategies many organizations use for strategy formulation. They are distinct from each

other and at some point similar. The resource-based view mainly focuses on the organization's

resources and capabilities to attain competitiveness. The view asserts that every company has an

exceptional assortment of resources & capabilities that are productive assets that helps the

companies create value (Madhani, 2015, p, 20). On the other hand, the competitive positioning

approach entails making the firm appealing in the market and differentiating it from its

competitors. One of the similarities is that they relate to strategy. A strategy is defined as a long-

term action plan that is set to help companies accomplish their goals. This means that they are

carried out to attain a business objective. According to (Gellweiler 2018, p, 2), the business

persons identify a market problem or opportunity that the business can solve to gain more profits

and a competitive advantage in the market. Most of the business strategies aim to examine the

market and look for opportunities that the firms can take advantage of to increase productivity

(Vartanova et al., 2021). Additionally, they understand the market trends and design feasible

solutions for responding to them and adapting to the innovative changes.

Another similarity between the Resource-based View (RBV) and competitive positioning

strategies is that they aim to attain a competitive advantage in the business environment.

Distanont and Khongmalai (2020, p, 16) define competitive advantage as an advantage that

companies develop in the market in the existence of competitors. The resource-based view

(RBV) examines and throws light on the interior designing strategies that can be used to attain a

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 sustainable competitive advantage. While competing in the business environment, firms ought to

use the available resources and capabilities that would help them stand out in the market. For

example, Coca-Cola Company has a qualified staff and available resources that allow them to

produce quality products that have attracted many customers from over two hundred nations in

the world. In competitive positioning, most firms apply porter's generic strategies in their

operations to attain competitive advantage (Gellweiler, 2018, p, 2). These strategies are cost

leadership, cost differentiation and focus. They aim at achieving a competitive advantage

through cost leadership by ensuring that the cost of production is reduced to maximize profits

(Gellweiler, 2018, p, 2). Differentiation helps the company design unique products that stand out

in the market. Finally, focus entails concentrating on a specialized segment of customers to

generate more profits and gain a competitive advantage.

Figure 1: image showing how the Resource-based view RBV (internal sources of change) and

competitive positioning (External sources of change) strategies bring about a competitive

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 On the differences, the primary contrast is what each view focuses on. The main focus of

the resource-based view is the use of the limited resources and capabilities in an organization to

attain a competitive advantage. On the other hand, the competitive positioning view aims to

make a firm's brand distinct from its rivals in a way that will create value and satisfy the needs of

the customers. According to Madhani (2015, p, 20), every company is supposed to have available

resources that are used to carry out the firm's operations. This means that every company has a

distinct allotment of resources and capabilities used to create value in the market. The resources

are mainly divided into tangible, intangible, and human resources. The tangible resources mainly

incorporate the financial resources and the firm's machines and equipment. The intangible

resources entail things such as technology, reputation and culture. Finally, human resources

include all the workforce ranging from high to low-level management and other employees.

Some of the capabilities are good human resource management, technological development,

outsourcing, supply chain management among others (Vartanova and Kolomytseva, 2019, p, 10).

Therefore, it is clear that the resource-based view mainly relies on maximizing the use of internal

capabilities and resources to attain a competitive advantage in the business environment.

The competitive positioning view uses porter's generic strategies to gain a competitive

advantage. As highlighted by Islami, Mustafa and Latkovikj (2021, p, 10), the strategies are cost

leadership, differentiation and focus. The cost leadership strategies help companies achieve

greater returns by offering commodities and services using the lowest costs. For example, Coca-

Cola uses economies of scale to generate large volumes of non-alcoholic beverages at the lowest

prices. Differentiation of commodities and services entails designing them with outstanding

characteristics that the consumers value. First, the firm must understand the customer

requirements to design products that will attract them. This helps in adding value to the

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 customers. Islami, Mustafa and Latkovikj (2021, p, 10) further explain that focus strategy is an

external strategy that entails focusing on a niche market and doing something extra that will

attract them to the company’s products.

Figure 2: Michael porter’s three generic strategies.

Another difference between the effectiveness of the resource-based view and competitive

positioning tactics is the unit of analysis. The unit of analysis for the resource-based view is an

organization or an individual resource or capability (Madhani, 2015, p, 19). This means that the

organizations are in a position of evaluating the firm's resources and capabilities and ensuring

that they exploit the strengths they are exposed to and react accordingly to the weaknesses. On

the other hand, the unit of analysis for the competitive positioning is the overall industry. For

example, Coca-Cola Company belongs to the beverage industry. Therefore, the company

examines the whole industry to devise ways of standing out in it amid competitors. Islami,

Mustafa and Latkovikj (2021, p, 10) denotes that the industrial strategy helps the companies

understand the competitive environment.

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 References

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 Distanont, A. and Khongmalai, O., 2020. The role of innovation in creating a competitive

advantage. Kasetsart Journal of Social Sciences, 41(1), pp.15-21.

Gellweiler, C., 2018. Cohesion of RBV and industry view for competitive positioning. Strategic

Management-International Journal of Strategic Management and Decision Support

Systems in Strategic Management, 23(2).

Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm

performance. Future Business Journal, 6(1), pp.1-15.

Madhani, P.M., 2015. The resource-based view (RBV) of competitive advantage: an overview.

Resource-based view: concepts and practices, Pankaj Madhani, ed, pp.3-22.

Vartanova, O. and Kolomytseva, О., 2019. Measurement of the key capabilities of the company:

approaches and methods. Manufacturing and Service Operations Management, 1(1),

pp.1-11.

Vartanova, O., Bilyk, V., Budnikevich, I., Kolomytseva, O. and Vasylchenko, L., 2021.

Enterprise competitive positioning based on knowledge resources identification.

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