Gurumurthy Kalyanaram, NYIT, former professor and Dean, presents short reports on Resource Advantage Theory. The following material is directly adapted from research by Seema Gupta et. al.
At the heart of the R-A theory are the concepts of resources, market position and financial performance (see Figure 1). Resources are the tangible and intangible assets available to a firm that enable it to efficiently and/or effectively produce a market offering that has value for certain market segment(s) (Barney, 1991; Wernerfelt, 1984). R-A theory categorizes resources as financial (e.g., cash reserves, access to financial markets), physical (e.g., plant, equipment), legal (e.g., trademarks, licenses), human (e.g., the skills and knowledge of individual employees), organizational (e.g., competencies, controls, policies, culture), informational (e.g., knowledge resulting from consumer and competitor intelligence), and relational (e.g., relationships with suppliers and customers) (Hunt and Morgan, 1995). Continue reading