CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
A packaged-foods company in Pune sells its products at prices similar to rivals, but customers pay a premium because of its brand trust and proprietary recipes that competitors cannot easily imitate. According to the resource-based view, the source of its sustainable competitive advantage is best described as:
Under the resource-based view, sustainable advantage comes from valuable, rare and hard-to-imitate resources. The firm's brand trust and proprietary recipes fit this description, whereas entry barriers, supplier power or discounting are industry or tactical factors rather than inimitable internal resources.
- AResources that are valuable, rare and difficult to imitateCorrect
- BLow barriers to entry in the industry
- CShort-term price discounting
- DHigh bargaining power of suppliers
Explanation
The resource-based view holds that sustainable advantage comes from resources that are valuable, rare, inimitable and organised for exploitation (VRIO). Brand trust and proprietary recipes fit this. Low entry barriers and supplier power are industry-structure factors, and discounting is not a sustainable resource-based advantage.
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