Key factors influencing the emergence of Disruptive Technologies

Comparing Positioning approach versus Resource Based View?

Business strategies have changed by necessity, the competitive advantage where organizations seek opportunities and adapt to changes in market conditions and embrace change through innovation and embed learning in the organization.

Strategy refers to a long-term action plan for achieving the stated aims of an organization.

Three dominant drivers – globalization, collaboration, and knowledge (including innovation) shape the modern business environment.

Both the Positioning Approach and Resource Based View relate to strategy, specifically carried out to meet a business objective or goal. A market problem or opportunity is identified and a solution is developed based on supporting research or data. Put simply these strategies carry out competitive analysis to find and/ or gain a potential competitive advantage.

The Positioning Approach is concerned with external analysis i.e. where your business it at. Porter’s theories are at the forefront of this approach. The Five Forces analysis (1979) is a framework that identifies the potential for making the profit in the industry and determining competitive intensity or industry attractiveness. It was developed as a reaction to the SWOT analysis which Porter found rigorous and ad hoc. They are considered forces close to a company that affects its ability to serve its customers and make a profit.

Porter’s Generic Strategies (1980) describes three types of strategies that are commonly used by businesses to meet and keep up competitive advantage: cost leadership (appealing to cost-conscious or price-sensitive customers), differentiation (differentiate the products in some way in order to compete successfully) and focus (describes the scope over which the company should compete in a target market – mass/ niche).

A value chain is a chain of activities a business performs to deliver a valuable product or service for the market. It is based on a process view of an organisation (system, subsystems, inputs, outputs etc.). Porter’s concept of a Value Chain (1985) as a decision support tool assesses the value each particular activity (primary or support) adds to the product or service. He argues that the ability to do and manage these activities is a source of competitive advantage.

Although the Positioning Approach predates the internet and its impact on business, Porter’s (2001) revision of strategic management thinking was influenced by the emergence of the internet as an important and disruptive technology – giving rise to the Virtual Value Chain. A key distinction is the physical value chain acts as a support mechanism whereas the virtual value chain has a strategic function.

The Resource Based View more closely links the internal capabilities and resources of an organization to levels of competitiveness (an inside view of competitive advantage). It emerged as the dominant theoretical perspective for undertaking studies into how firms can leverage the advantages of IS into strategies for gaining competitive advantage. It recognizes the tangible and intangible resources a firm have (e.g. process knowledge, expertise).

Firms need to acquire the right iT infrastructure and business process capabilities to exploit that infrastructure

Byrd & Turner (2000) extend this concept to merge IT management as a further part of IT infrastructure thereby bringing the framework into the realm of RBV by recognizing the role of controlling, coordinating and managing IT resources and capabilities in the quest for achieving competitive advantage.

Barney (1991) argues that “for a firm to gain a competitive advantage through superior performance requires rare resources and capabilities , valuable and non-substitutable and non-imitable.”

The Positioning Approach and Resource Based View paradigms are limited by the static nature of the models used for analysis. Teece et al (2001) developed RBV further by introducing the concept of Dynamic Capabilities to discuss this shortcoming by focussing attention on how resources can be developed, integrated and then released to competitive advantage in rapidly changing environments.

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