Resource Based View (RBV) of Competitive Advantage: An Overview

The Resource Based View (RBV) takes an ‘inside-out’ view or firm-specific perspective on why organizations succeed or fail in the market place. According to RBV, firm’s abilities also allow some firms to add value in customer value chain, develop new products or expand in new marketplace. The RBV draws upon the resources and capabilities that reside within the organization in order to develop sustainable competitive advantages. However, not all the resources of firm will be strategic and hence, sources of competitive advantage. Competitive advantage occurs only when there is a situation of resource heterogeneity and resource immobility.