Can competitive advantage be predicted? Towards a predictive definition of competitive advantage in the resource-based view of the firm

Management Decision

How can executives predict which capabilities and resources will lead to superior profitability? We propose to extend the RBV (resource based view) with demand-based variables on customers and markets, so that firms can determine, ex ante, which resources and capabilities will translate into a competitive advantage and superior profitability.

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Publications

This framework highlights how decisions about purchase prices by customers and price setting decisions by managers consistently violate rational choice principles.
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