Applying the appropriability criterion in VS .NET

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Applying the appropriability criterion
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This resource value criterion also concerns the issue of the appropriability of the value and attempts to discover who captures the value that the resource creates The value of the resource is subject to bargaining among customers, suppliers, distributors and employees In many situations the rm that owns the resource does not capture the full value of the resource; the value dissipates to other rms in the business system This is a matter of concern in the new market entry decision whereby some distribution channels may favour the appropriation of value to the rm while others do not
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Applying the rarity criterion
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If an organization s resource or capability is controlled by numerous competing organizations then that resource is unlikely to be a source of competitive advantage for any of them Instead, valuable but common resources and capabilities are sources of competitive parity This is a matter of rarity in the resources and capabilities How rare a valuable resource and capability must be in order to be considered competitively advantageous depends on the circumstances If the organization s valuable resources are absolutely unique among a set of competitors, they can provide a competitive advantage It may be possible for a small number of organizations to possess a particular valuable resource and still obtain a competitive advantage provided there are many others who do not have the advantage While common resources and capabilities cannot generate a competitive advantage, they can help to ensure an organization s survival when they
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[98] Strategic Marketing
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are exploited to create competitive parity Under parity conditions no one organization gains a competitive advantage, but organizations increase their chances of survival
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Applying the imitability criterion
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The most common competitor-centred approach, based on different forms of differentiation, refers to distinctive competences that are based on skills and resources used by the organization in ways not easily imitated by competitors (Hofer and Schendel 1978) The protection provided by the resource imitation test may be undermined if duplication or substitution is possible Suppose an organization possesses a competitive advantage because of its research and development or marketing capabilities, then a competitor can attempt to develop its own research and development and marketing competences If the cost of duplicating an organization s capabilities is greater than the cost of developing these resources and capabilities for the organization with the competitive advantage, then this may be a sustainable competitive advantage If the cost of duplication is no more costly than the original development of these resources and capabilities, then any competitive advantage will be only temporary Imitating organizations may also attempt to substitute other resources for a costly-to-imitate resource possessed by an organization with a competitive advantage If one organization, for example, has a competitive advantage because of its direct marketing skills, a competing organization may try to substitute a sophisticated CRM system If the effects of direct marketing skills and CRM systems are the same, then these resources may be thought of as substitutes If a substitute resource exists, and if imitating organizations do not face a cost disadvantage in obtaining them, then the competitive advantage of other organizations will only be temporary If these resources, however, have no substitutes or if the cost of acquiring them is greater than the cost of the original resource, the competitive advantage can be sustained Competing organizations face a cost disadvantage in imitating another s resources and capabilities but there are circumstances where the imitability test can be met To meet the criterion the resources must have a physical uniqueness which may be patented or are unique in some way and accumulated over time, eg brand loyalty It also means that it should be impossible for outsiders to disentangle what the resource is or how to create it Such causal ambiguity is often associated with organizational capabilities To protect a resource, rms often engage in a strategy of economic deterrence whereby they make large investments in the asset relative to its current market share; hence the large advertising expenditures by big-brand organizations
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Competition in the business system [99]
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