Strategic planning and analysis of various factors are the basis for a successful business. The advantage over competitors is achieved not only by the correct positioning of the company but also by the assessment of the resources available to it. Thus, positioning school and the resource-based view of strategy are different in terms of analysis subjects and tools. However, both seem to be limited approaches since they focus on either internal or external aspects of operating.
Positioning school ideas are traced to Michael E. Porter and are based on his five forces framework. The concept behind this strategic analytical approach is “positioning the firm within the context of its industry” (Ashour, 2018, p. 2). Thus, the feature of the school is to consider the organization in the context of a competitive environment (Ingason and Jonasson, 2018). Strategically, any factor outside the firm can pose a threat to its performance. Thus, the model’s primary goal is to help managers analyze the specific environment and neutralize possible risk factors. The positioning school emphasizes that certain strategies (positions within the marketplace) are suitable for activities in specific industries (Mintzberg, Ahlstrand, and Lampel, 2020). Thus, an organization that has occupied the right position in the market has more profit than others. The definition of the strategy depends on the generic features of the organization depending on the area and nature of its operations (Ingason and Jonasson, 2018). Thus, the strategy is based on the analysis of generic features depending on the characteristics of the market and its structure.
An example of a positioning school strategy might be considering a product as of superior quality in comparison to competitors. To do this, the company can create the illusion of product exclusivity, which forces people to pay a high price for it. For instance, the company can limit the distribution of golf equipment only to branded stores. People pay more for a product and consider it to be of better quality since it can only be purchased in a certain place.
Resource-based view is traced to the name of economist Edith Penrose and is based on the analysis of production factors. The main idea of the approach is the assumption that the performance of the organization is determined by what it invests in it (Sminia, 2017). Land, labor, and capital are considered the resources that a firm uses for operations. Thus, the difference in the productivity of organizations is determined by the various resources they invest in their activities. According to this view, “all outcomes are related to the fundamental uniqueness of each resource package” (Buckley, Enderwick, and Cross, 2018, p. 25). Thus, the value of an organization in the market is supported by its resources, especially those that competitors do not possess. Based on an analysis of the resources available to the firm and its competitors, a strategy can be developed to optimize their use for operations.
An example of a resource-based view strategy is Rolex, a luxury watch manufacturer. The organization uses its unique resources in the form of a school of Swiss watchmaking and builds marketing on this. The company’s competitors cannot offer the same level of quality and uniqueness because they do not have the same resources. The image of the organization is built on the use of unique features, which provides it with distinctiveness.
The main distinction between the two methods of building a strategy is the focus on different groups of factors. A positioning school is an outside-in approach since the company’s activities are determined by the market and its analysis (Collings, Wood, and Szamosi, 2018). On the contrary, the resource-based view depends on the internal resources of the firm to determine the strategy. Thus, positioning involves analyzing and responding to external factors, while the resource approach considers internal capabilities and maximizing their use. Both approaches are based on the concept of competition and the achievement of business goals, directed to the most profitable operation of the company in comparison with competitors in the market. None of the strategies presented offer a model for how it should function in practice. Approaches have a limited set of analytical tools since both external and internal factors must be taken into account.
Positioning school and the resource-based view of strategy appear to be completely different approaches to analytics and strategy building. Positioning considers external factors in terms of industry and market conditions. The resource perspective focuses on mobilizing the internal capabilities of the firm to create a unique product. However, both approaches aim to improve the competitiveness of the organization. Presented models appear to be limited since they consider only external or internal aspects of the analysis. For the effective operation of the film within the market, it is necessary to consider the organization’s capabilities and the conditions of the industry.
Reference List
Ashour, M. (2018) ‘Schools thought of competitive advantage’, International Journal of Business and Management Invention, 7(2), pp. 1-6.
Buckley, P. J., Enderwick, P. and Cross, A. R. (2018) International business. Oxford: Oxford University Press.
Collings, D. G., Wood, G. T. and Szamosi, L. T. (2018) Human resource management: a critical approach. Abington: Routledge.
Ingason, H. T. and Jonasson, H. I. (2018) Project: strategy. Abington: Routledge.
Mintzberg, H., Ahlstrand, B. and Lampel, J. B. (2020) Strategy safari. London: Pearson UK.
Sminia, H. (2017) The strategic manager. Abington: Routledge.