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CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge

Which of the following is a typical test used to judge whether a capability is a distinctive competence that can support competitive advantage, as per Barney's resource-based view?

Barney's resource-based view tests whether a capability is valuable, rare, inimitable and non-substitutable. Resources equally available to all, recorded in accounts or recently acquired do not necessarily give advantage, because advantage depends on scarcity and difficulty of copying.

  1. AWhether the capability is available equally to all industry players
  2. BWhether the capability is valuable, rare, inimitable and non-substitutableCorrect
  3. CWhether the capability is recorded in the balance sheet
  4. DWhether the capability was acquired in the last financial year

Explanation

The resource-based view holds that resources supporting sustained advantage must be valuable, rare, inimitable and non-substitutable. Availability to all players would make the resource common, balance sheet recognition is irrelevant since many such resources are intangible, and acquisition timing has no bearing.

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