Relevance of RBV When Facing Low Cost Competition

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Warren, Australia

Relevance of RBV When Facing Low Cost Competition

Is the RBV still relevant given the rise of competition from low wage countries (ie China)?
New competitors are not imitating incumbents resources so much as redefining them.

  Mohan Fonseka
Student (University), China

RBV is Relevant Also in the Face of Low Cost Competition

Why not. Cost leadership is one thing. But innovation capability, technology and HR, financing capabilities are also relevant sources of capabilities.
These capabilities help to gain more advantage over cost leadership alone. China is still a regulated economy and financing activities are not the same for all firms. Regulatory bodies such as China security regulatory commission create guidelines for the firms' eligibility for financing.
Therefore I think financing capabilities can give competitive advantage to firms in China.
Institution-based view is more relevant than RBV for financing capabilities creating competitive advantage.

  Warren Miller, CPA, CFA
Strategy Consultant, United States

The Relevance of the RBV in the Face of Low-Cost Competition

Thank you for your question. I'll try to be helpfu...


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