A Resource-Based View of the Firm

Posted: 17 Nov 2009

See all articles by Birger Wernerfelt

Birger Wernerfelt

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: 1984


Firms can be analyzed from the resource or product aspect. This paper develops simple economic tools for analyzing a firm's resource position, and uses a resource product matrix to examine some strategic options suggested by the resource-based view. The resource-based view provides basis for addressing key issues in strategy formulation, such as basis for diversification and acquisition. A resource is any strength or weakness of a given firm, tangible or intangible, that is semi-permanently tied to the firm. Considered specifically are the circumstances that will lead to longer-term high returns. Strategies that allow a firm's resources to be managed for high returns are considered, under four circumstances: bargaining power of suppliers and buyers and threat of substitute resources, first mover advantages, building resource position barriers, and mergers and acquisitions. A resource-product matrix is used to illustrate several patterns of resource development: sequential entry, exploit and develop, and stepping stones. Examining a firm in terms of its resources and assets rather than its products provides a different view of available strategic options, and helps to identify means of using its resources as barriers to other firms. (TNM)

Keywords: Growth strategies, Firm strategies, Strategic planning, Assets, First-mover advantage, Barriers to entry, Resource model, Firm growth

Suggested Citation

Wernerfelt, Birger, A Resource-Based View of the Firm (1984). Strategic Management Journal, Vol. 5, Issue 2, p. 171-180 1984. Available at SSRN: https://ssrn.com/abstract=1505260

Birger Wernerfelt (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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