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ACCA Strategic Professional · Strategic Business Leader · Concepts of strategy

Zephyra Foods, a regional bakery chain, is considering how to protect its position. Its managers note that customers value its sourdough recipe, which rivals could copy within months, though Zephyra's relationships with local farms, built over twenty years, are hard to replicate. Under the resource-based view, which description best identifies a source of sustainable competitive advantage?

The farm relationships are the sustainable source of advantage. Under the resource-based view, a resource must be valuable and hard for rivals to imitate. The recipe can be copied within months, so its advantage is temporary, while long-built relationships with farms cannot easily be replicated.

  1. AThe sourdough recipe, because it is valued by customers
  2. BThe farm relationships, because they are valuable and difficult for rivals to imitateCorrect
  3. CThe sourdough recipe, because it is the product customers see
  4. DNeither, because only physical assets can create sustainable advantage

Explanation

The resource-based view says advantage is sustainable when resources are valuable, rare, hard to imitate and non-substitutable (VRIN). The recipe is valuable but easily copied, so it gives only temporary advantage. The twenty-year farm relationships are hard to replicate, so they are the sustainable source.

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