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Core competence and the resource-based view

Firms don’t just become profitable because of the generic strategy they have chosen. Sometimes, their internal resources and capabilities are sufficiently unique that other firms cannot match them. These models help a firm to understand and to develop their internal capabilities so that they become a source of competitive advantage.

When to use it

  • To understand why one firm is more profitable than another, even when they have the same position in the market.
  • To improve profitability and growth in your own firm.

Origins

Thanks largely to Michael Porter’s influential work, thinking about strategy in the 1980s was all about how firms positioned themselves within their chosen industry – it was ...

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