Economic rent though company distinctive capabilities


Problem:

Step One: RBV is based on the concept of the creation of economic rent though the company's distinctive capabilities. Thus, the first step is to find a way to value a firm's economic rent or Economic Value Added (EVA). A firm's EVA is the amount of capital it generates above and beyond the cost of doing business. Find out how EVA is measured and how you can determine a company's economic rent. According to RBV, a firm's competitive advantage is driven by its ability to manage its unique capabilities and resources to achieve above average returns.

Step Two: Resources are the inputs into a production process. They can be capital, equipment, patents, skill sets of individual employees and/or managers, financial resources, etc. Resources can be tangible or intangible. Individually, they may not necessarily lead to a competitive advantage - it is how they are used and the synergies they create that make them strategically valuable. Research web and library sources that will give you data on a company's unique resources. Find a minimum of 2 different sources for data and information related to each of the following 6 resources, noting that some sources may give you information on more than one factor:

Tangible Resources

1. Physical Resources
2. Financial Resources
3. Human Resources

Intangible Resources

1. Technical Resources
2. Intellectual Resources
3. Goodwill

Step Three: Distinctive capabilities are those competencies possessed by a firm that cannot be copied or can be replicated only with great difficulty or resources. Research web and library sources that will give you data on a company's unique resources. Find a minimum of 2 different sources for data and information related to the following:

1) Architecture,
2) Reputation, and
3) Innovation.

Step Four: List your resources from steps 1-3 above. For each source, provide a brief paragraph explaining what information is available, how it would be useful in an internal analysis, and critiquing the source (for example, what are the limitations of the source? Is one better than the other? Why?)

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