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Competing on Resources
harvard business review •
uly–august 2008
page 12
portunity to strengthen its capabilities. Today,
Newell holds leading market positions in
drapery hardware, cookware, glassware, paint-
brushes, and office products and maintains
an impressive 15% earnings growth annually.
What differentiates this diversified company
from a host of others is how it has been able
to use its corporate resources to establish and
maintain competitive advantage at the busi-
ness unit level.
However, even Newell benefits from the
attractiveness of the markets in which it com-
petes. All its products are infrequently pur-
chased, low-cost items. Most consumers will
not spend time comparison shopping for six
glasses, nor do they have a sense of the mar-
ket price. Do you know if $3.99 is too much to
pay for a brass curtain rod? Thus Newell’s re-
sources are all the more valuable for being de-
ployed in an attractive industry context.
• • •
Whether a company is building a strategy
based on core competencies, is developing a
learning organization, or is in the middle of a
transformation process, those concepts can all
be interpreted as a mandate to build a unique
set of resources and capabilities. However, this
must be done with a sharp eye on the dynamic
industry context and competitive situation,
rigorously applying market tests to those re-
sources. Strategy that blends two powerful
sets of insights about capabilities and competi-
tion represents an enduring logic that tran-
scends management fads.
That this approach pays off is demonstrated
by the impressive performance of companies
such as Newell, Cooper, Disney, and Sharp.
Although these companies may not have set
out explicitly to craft resource-based strate-
gies, they nonetheless capture the power of
this logic and the returns that come to those
who do.
1. To date, the most attention paid to the integration of the
two perspectives has been by Michael E. Porter in
tive Advantage: Creating and Sustaining Superior Perfor-
(Free Press, 1985) and, in the dynamic context, in his
article “Towards a Dynamic Theory of Strategy,”
Management Journal
, Winter 1991.
2. These ideas were first discussed in two articles published
Management Science:
Ingemar Dierickx and Karel Cool,
“Asset Stock Accumulation and Sustainability of Competi-
tive Advantage,” December 1989; and J.B. Barney, “Asset
Stocks and Sustained Competitive Advantage,” December
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