hello everyone welcome to business school 101 have you ever wondered how companies gain a Competitive Edge in the marketplace what makes some firms more successful than others even when they operate in the same industry the answer often lies in a strategic approach known as the resource-based view or rbv this Theory emphasizes a company's internal resources as the key to achieving a sustainable competitive Advantage but what exactly is rbv where did it come from are there some real world examples and what are its benefits in this video I'll be discussing these questions with you section one origin The resource-based View rbv emerged in the field of strategic management in the 1980s and gained prominence through the work of Scholars like Jay Barney in 1991 Barney published a seminal paper titled firm resources and sustained competitive Advantage which formalized the rbv framework his research argued that a firm's unique internal resources are the foundation of its ability to outperform competitors the theory shifted Focus from external factors to internal strengths that companies could leverage to sustain long-term success section two definition at its core the resource-based view rbv is a strategic management theory that suggests a firm's internal resources its assets capabilities and competencies are the primary drivers of its competitive Advantage according to rbv resources that are valuable rare inimitable and non-substitutable VR Rin are key to sustaining a firm's Edge in the marketplace instead of solely reacting to external factors like competition or industry Trends rbv encourages firms to focus on what they already possess internally section three key components rbv revolves around the vrin framework which outlines the qualities that resources must have to provide a sustainable competitive Advantage number one valuable a resource is valuable if it helps the company improve efficiency Effectiveness or customer satisfaction for instance a unique technological innovation that boosts productivity or reduces costs is considered valuable because it enhances the firm's operations number two rare the resource must be uncommon within the industry if every competitor can access the same resource it cannot provide a competitive Advantage a brand like apple has cultivated deep Customer Loyalty making its brand Equity a rare and Powerful asset number three inimitable inimitable resources are those that competitors cannot easily replicate or duplicate this could be due to proprietary technology unique company culture or long-standing relationships with customers Coca-Cola's secret formula for example is inimitable because Rivals cannot precisely recreate it number four non-substitutable a resource is non-substitutable if it cannot be replaced by other resources that provide similar benefits for example Google's culture of innovation is non-substitutable because no other company can easily replicate the combination of talent work environment and creativity that drives its success section four process of applying rbv to leverage rbv effectively companies follow these Steps step one identify Key Resources the first step in rbv is conducting an internal audit to identify all the resources that make the firm unique these could include tangible assets like proprietary technology intangible assets like brand reputation or human resources like skilled employees and Leadership expertise step two assess resources using vrin once identified resources must be evaluated against the vrin criteria companies focus on resources that meet these four standards valuable rare inimitable and non-substitutable because these are the ones that will drive long-term success step three develop a strategy with key resources identified companies can craft strategies that leverage these internal strengths for example a firm with a unique intellectual property portfolio might prioritize Innovation to stay ahead of the competition while a company with a strong brand reputation might focus on customer loyalty and premium pricing step four sustain and enhance resources firms must continue to invest in and protect their valuable resources this may involve securing patents training employees improving operational efficiencies or innovating new products sustaining these resources ensures that the competitive Advantage endures over time section five real world examples let's explore how three well-known companies apply rbv in their strategies example one byd's Battery Technology and vertical integration byd a leading Chinese manufacturer of electric vehicles and rechargeable batteries leverages the rbv through its Advanced Battery Technology and vertically integrated supply chain BD's proprietary Battery Technology which it develops in-house is a critical resource that allows it to control key components of its EVS additionally byd integrates manufacturing processes from raw materials to final Vehicle Assembly giving the company control over costs and quality this unique combination of resources enables byd to compete effectively in the global EV Market particularly as demand for sustainable transport grows example two Nike's brand and product Innovation Nike's competitive Advantage is largely derived from its globally recognized brand and its focus on product Innovation the company's investment in research and development enables it to continually release cuttingedge products such as its fly at technology and self-lacing shoes Nike's brand reinforced by high-profile endorsements and Global Marketing campaigns is one of the most valuable Assets in the sportsware industry these internal resources help Nike maintain its leadership position and allow it to command premium pricing while building strong Customer Loyalty example three infosis and Knowledge Management infosis an Indian IT services giant applies The resource-based View by emphasizing Knowledge Management and intellectual Capital the company has developed robust Knowledge Management systems that allow it to capture and share valuable expertise across projects and geographies infosis invests heavily in training and certification programs for its Workforce ensuring that it stays ahead in Technology Innovation and Service delivery this internal resource its vast pool of skilled employees and intellectual Capital enables infosis to deliver complex IT solutions globally and maintain its position as a leader in the competitive IT services sector section six benefits of rbv the resource-based view offers several key benefits for businesses number one sustainable competitive Advantage by focusing on rare and inimitable resources companies can maintain their Competitive Edge even in a changing Market environment unlike strategies based purely on external factors rbv ensures that a company's internal strengths remain a source of lasting success number two focus on core strengths rbv encourages companies to leverage their existing resources rather than chasing short-term market trends by concentrating on what they already do best firms can achieve deeper expertise and differentiation in their Industries number three long-term profitability by nurturing valuable and rare resources over time firms can build a strong foundation for long-term success reducing vulner unability to external disruptions and Market shifts section s summary in conclusion the resource-based view rbv is a powerful framework that highlights the importance of internal resources in achieving a competitive Advantage developed in the 1980s and popularized by J Barney rbv focuses on resources that are valuable rare inimitable and nonsubstitutable to create a sustainable Edge by identifying and nurturing these resources businesses can position themselves for long-term success that's all for today's topic if you have any questions or thoughts feel free to leave a comment below I hope you found this video insightful don't forget to give it a thumbs up and subscribe to my channel for more discussions on Strategic Management thanks for watching and I'll see you next time