This paper examines two dominant schools of thought in strategic management: resource-based strategies and competitive positioning strategies. Resource-based strategies focus on leveraging a firm's internal assets — including tangible resources, human capital, technology, and brand — to create value and achieve competitive advantage. Competitive positioning strategies, by contrast, begin with identifying market opportunities and then aligning organizational resources accordingly. Drawing on a review of academic literature across industries and international contexts, the paper analyzes key findings related to each approach, explores how stakeholder profiles, environmental regulations, and consumer perceptions influence strategy selection, and concludes that a hybrid approach combining both strategies may be most effective for firms operating in the complex, resource-constrained environment of the 21st century.
There are two schools of thought regarding the composition of a competitive strategy. The first is resource-based. This approach identifies key resources and seeks to leverage them in order to provide value to the consumer and achieve a competitive advantage in the marketplace. The second strategy begins with identifying a niche — or more general opportunity — in the market and then aligning organizational resources to achieve a competitive position relative to the competition. The former can be generalized as more of a push strategy, while the latter is more of a pull strategy.
Both approaches have advantages as well as disadvantages, and each fits certain circumstances better than others. In this research project, a brief literature review of both vantage points is provided, followed by a brief analysis of relevant implications.
Resource-based strategies are commonly applied to industries that operate under conditions of scarcity. Firms operating in these industries typically try to maximize the efficient and effective use of available resources — whether those resources are commodities, raw materials, or human capital. One study identified the need for an advanced market assessment to be used as a research tool to uncover the unmet or under-met needs in a community (Eschenfelder, 2010). If an accurate picture of community needs is developed, then the organization's available resources can be aligned to best fulfill those needs. Having access to key market metrics is vital for the success and profitability of resource-based strategies.
Although resource-based strategies are commonly conceived in terms of tangible resources, this is not always the case. Another application of resource-based theory has been applied to the national label attached to Chinese exports — "Made in China" (Zhang & Su, 2009). It is postulated that since a brand image must be grounded in the organization's standing — in this case, Chinese manufacturers — firms must be able to claim superior resources in order to maintain the added value that the brand receives from consumers. Because Chinese brands have faced quality issues in some exports, China must treat quality as a strategic resource that requires efficient management in order to restore brand value.
Research has also indicated that when a private organization expands through a greenfield strategy, a resource-based approach allows companies to fully utilize internal competencies that translate into value-added contributions in the new market entry (Berry-Stolzle, Altuntas, & M., 2010). The authors found evidence consistent with the view that the internal resources of parent companies significantly contributed to the development of competencies within subsidiaries. Since the resource-based approach is not limited to traditional concepts of resources, it can also be applied to various organizational structures (Pertusa-Ortega, Molina-Azorin, & Claver-Cortes, 2010). These authors investigated how organizational structure affects firm performance and found that in larger organizations an indirect influence exists due to the competitive strategy employed.
Another study used a resource-based lens to examine whether new ventures in high-technology industries could add value to accumulated resources and thereby provide a competitive advantage (Lin, Lin, & Bou-Wen, 2010). It found that three core elements — technology, networking, and legitimacy — are significant in predicting the success of such ventures. From the resource-based view, it is not difficult to see how improvements in technologically derived resources would provide an overall benefit to the entire parent organization.
The competitive positioning strategy seeks to identify opportunity within a competitive landscape and mobilize resources to achieve the intended market position. This makes sense on many levels; however, one fundamental challenge is that the competitive landscape is dynamic in nature, and therefore the strategy must be as well. One study analyzed companies' competitive strategies in relation to the competitive landscape and also examined the environmental conditions found in the international construction industry in both the United States and Turkey (Korkmaz & Messner, 2008). The researchers found that while strategies are fairly consistent in their overall ambitions, they do change in response to environmental considerations that unfold over longer time scales.
Another study examined whether the stakeholder profile — differences found in the structures, composition, and ambitions of stakeholder groups — influenced the competitive strategies that firms pursue (Greenley, Hooley, Broderick, & Rudd, 2004). The researchers found evidence that the stakeholder profile did influence strategic planning among a group of UK firms. This may be attributable to the fact that various stakeholder profiles carry different ambitions, particularly with respect to risk aversion. A stakeholder profile that is less risk-averse would reasonably be more aggressive in pursuing opportunities identified in the market.
There are many variables involved in understanding how a competitive positioning strategy is created and, once created, defended against imitation or encroachment (Hooley, Greenley, Fahy, & Cadogan, 2001). Positioning strategies attempt to create value for consumers by filling needs; however, this depends to a large extent on how consumers perceive the initiative. One emerging area of research addressing this issue focuses on consumer perceptions. Global consumer culture positioning (GCCP) and perceived brand globalness (PBG) represent two important constructs for studying international advertising in the context of global consumer culture (ARchpru & Alden, 2010). Ultimately, the consumer is largely the final judge of any competitive strategy, and evaluating consumer perceptions is one way to determine the level of success or failure within a positioning strategy.
Positioning strategies are by no means limited to the business world. The same concepts can be applied to the political sphere, where marketing and perception awareness play an integral role. One study examining Mexico's 2006 election found that five factors were most responsible for a political candidate's (brand's) success: competence, empathy, openness, agreeableness, and physical appearance (Fransico & Vicenta, 2009). There are undoubtedly ethical concerns with such an application of the theory — particularly whether candidates should be promoted on the basis of their marketing "qualities" rather than the substance of their positions on various issues.
Of the two strategies, it is reasonable to argue that the pull strategy should, at least in theory, be better equipped to meet the needs and wants of consumers. However, the rise of global warming research and environmental concerns adds another layer of complexity to the debate. There is reason to believe that humanity may reach a point at which natural resources and the production processes that contribute to various forms of pollution will need to be controlled and restricted. Evidence that this is already underway can be seen in the worldwide adoption of environmental regulations; in fact, the United States has been among the last to adopt such regulations, and it is predicted that this trend cannot continue indefinitely.
It may very well be the case that both types of strategies must be combined to meet the demands of a new century. For instance, if heavy restrictions are placed on the use of resources, then a resource-based strategy must obviously be incorporated. At the same time, given the resources available to any particular firm, a positioning strategy could be adapted to fill the consumer needs identified in the marketplace. The boundaries between the two strategies are not restrictive in the sense that any one organization must choose exclusively between them.
Both resource-based and competitive positioning strategies offer distinct advantages depending on the circumstances a firm faces. Resource-based approaches are well suited to environments of scarcity and to organizations with strong internal competencies they can leverage across markets. Competitive positioning approaches are better suited to dynamic market environments where identifying and filling consumer needs is the primary driver of value creation. It is recommended that any organization choose based on pragmatic criteria suited to the requirements of its particular situation, and that in many cases a hybrid approach drawing on both frameworks will be most effective.
ARchpru, M., & Alden, D. (2010). Global brand positioning and perceptions. International Journal of Advertising, 37–56.
Berry-Stolzle, T., Altuntas, & M. (2010). A resource-based perspective on business strategies of newly founded subsidiaries: The case of German Pensionsfonds. Risk Management & Insurance Review, 173–193.
Eschenfelder, B. (2010). Using community based assessments to strengthen nonprofit-government collaboration and service delivery. Journal of Health & Human Services Administration, 405–446.
"Hybrid strategies amid environmental constraints"
Lin, E., Lin, T., & Bou-Wen, L. (2010). New high-tech venturing as process of resource accumulation. Management Decision, 1230–1246.
Pertusa-Ortega, E., Molina-Azorin, J., & Claver-Cortes, E. (2010). Competitive strategy, structure and firm performance. Management Decision, 1282–1303.
Zhang, S., & Su, X. (2009). Made in China at a crossroads: A resource-based view. Journal of Public Affairs, 313–322.
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