ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation
Zenith Logistics owns a fleet of modern trucks and a large warehouse network. Rivals can buy identical trucks and lease similar warehouses within months. According to the resource-based view, how should the board regard these assets in terms of competitive advantage?
The trucks and warehouses are threshold resources. Competitors can easily obtain identical assets, so they are needed to operate in the market but do not give sustained competitive advantage, which requires rare, inimitable and non-substitutable resources or competences.
- AThey are threshold resources that allow the firm to compete but do not by themselves give sustained advantageCorrect
- BThey are unique resources that will deliver sustained advantage because they are costly
- CThey are core competences because they underpin daily operations
- DThey are dynamic capabilities because they can be redeployed quickly
Explanation
Assets that rivals can easily acquire are threshold resources: they are needed to compete in the market but are not rare, inimitable or hard to substitute. Sustained advantage needs resources or competences that are valuable, rare, inimitable and non-substitutable. Cost alone does not make an asset unique.
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