The Resource-Based View (RBV) is a strategic management framework that focuses on the

internal resources and capabilities of a firm as sources of competitive advantage. It suggests

that a company's unique resources and capabilities, when effectively deployed, can lead to
sustained competitive advantage and superior performance. The RBV contrasts with external-
focused perspectives, such as industry analysis, by emphasizing the importance of internal
factors in achieving and maintaining a competitive edge.
Key principles of the Resource-Based View include:
Resource Heterogeneity: Firms possess different sets of resources and capabilities, and these
differences contribute to competitive advantages. Resources can be tangible (physical assets,
financial resources) or intangible (knowledge, brand reputation, organizational culture).
Resource Immobile: According to RBV, resources should not be perfectly mobile or easily
transferable between firms. If resources were easily replicable or transferable, they would not
lead to sustained competitive advantage.
Valuable, Rare, Inimitable, and Non-substitutable (VRIN) Criteria: For a resource to be a source
of sustained competitive advantage, it must meet the VRIN criteria. It should be valuable, rare,
difficult to imitate, and non-substitutable by other resources.
Dynamic Capabilities: RBV recognizes the importance of dynamic capabilities, which involve a
firm's ability to adapt and change its resource base over time. This adaptability is crucial for
responding to changes in the business environment and sustaining competitive advantage.
Strategic Factor Markets: RBV emphasizes the role of strategic factor markets, where firms can
acquire or divest resources to enhance their competitive position. These markets include labor
markets, capital markets, and technology markets.
Core Competencies: RBV is related to the concept of core competencies, which are bundles of
resources and capabilities that enable a firm to achieve a competitive advantage in specific
markets. Developing and leveraging core competencies is essential for long-term success.