Can 'Product Design Capability' be a Resource for an Organization?


 
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Can 'Product Design Capability' be a Resource for an Organization?
Naveed Mushtaq, Professor, Malaysia

I am trying to fit Product (or Service) Design from the perspective of Resource-based theory, with a special emphasis on VRIN (or VRIO).
In this approach, product/service design is then being viewed as a capability which has characteristics of VRIN and could provide a competitive advantage to the firm over others who don't have such design capabilities.
Such a capability might become an important resource at firm level for the organization. Please add your reactions, experiences, tips; anything is welcome. Thanks.
 

 
RBV Resource View: Product Design
Nita, CEO, United States
One of the criticisms of RBV is that it doesn't really define what a resource is. There is a good journal article by Kraaijenbrink, Spender, & Groen (2010) that discusses this issue. If you want to look it up, it is 'The resource-based view: A review and assessment of its critiques" from the Journal of Management 36(1), 349-372. It would be worth reading.
I THINK the issue you bring up is discussed in #8.
My personal opinon is that product or service design could definitely be a resouce. The author I mention suggests that even something as nebulous as economy of scale could be a resource. Let's face it, not everyone can design good products or services, so to me it could definitely qualify as a resource.
 

 
RBV / Resources
Warren Miller, CFA, CPA, Other, United States
In his book, Gaining and Sustaining Competitive Advantage, Jay Barney gave examples of four types of capital. In my book, Value Maps: Valuation Tools That Unlock Business Wealth (John Wiley & Sons, Inc., 2010), I provided measures for each of the 4 examples that Barney gave:
  1. FINANCIAL - Examples of resources: borrowing capacity, liquidity, ability to raise equity capital, sustainable growth rate.
  2. PHYSICAL - Examples: productive capacity, investment service, dedication to maintenance, fungibility of fixed assets, technological commitment, and access to suppliers.
  3. HUMAN - Examples: educational level, commitment to training, thirst for knowledge, employee commitment, leadership ability, trust, and experience
  4. ORGANIZATIONAL - Examples: loyalty, teamwork, reputation, product innovation, process innovation, speed.
The examples of each type of capital are just that: examples. If you add another resource, make sure you can measure it objectively.
 

 
Product/Service Design Capability
Jaap de Jonge, Editor, Netherlands
@Warren Miller, CFA, CPA: Thank you for your outstanding contribution!
So yes, product or service design capability could definitely be a resource at firm level as meant in RBV and would predominantly fall in the 4th category you mentioned.
 

 
 

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