Answer the following questions:

1. Give a critical assessment of the positioning view of competitive advantage. Where and when can it be used? What are its limitations?

Outside in approach, Porter Five Force analysis how profitable the industry is while generic strategy (Cost leadership, differentiation, focus strategy to maintain the competitive advantage of the organization. It can be used in any industry and can be used when an organization intend to enter a new market. Limitation assumes the industry structure where organization operating determines organization’s profitability. The positioning school focuses too narrow only in industry may face danger of missing the weak signal. Assumes firms have equal resources.

2. What are the key contributions of the resource based view of the firm to understanding competitive advantage? Where and when can it be used? What are its limitations?

‘Inside out approach’ helps firms to identify uneven resources are allocated to different firms. Identified the resources of each firm is the fundamental to competitive advantage, analysis from 2 part, intangible and tangible resources and use VRIN audit to assess how distinct these resources are. Capability is the capacity and ability to integrate tangible and intangible asset together and therefore has the competitive advantage to achieve its objective. It can be within the organization or country to analysis their unique resources and should be used when they want to remain competitive advantage. Its limitation is described too simply what is already exist in firm, it is a theory rather than a strategy direct organization to be success.