Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 6 UNDERSTANDING THE ORGANISATIONAL RESOURCE BASE
6.1 
Marketing resources as the foundation for differentiation 
While any organisation could produce a long list of the resources at its disposal, what is 
important is to identify those resources that can help create a competitive advantage, and 
ideally an advantage that can be sustained into the foreseeable future – a sustainable com-
petitive advantage (SCA). Theories developed in the strategic management field can be help-
ful. Strategic management theorists have shown that a sustainable competitive advantage 
can be achieved when distinct resources are employed that are resistant to competitor imita-
tion or duplication. The resources that will most likely create sustainable advantage have 
a number of key characteristics. First, they enable the provision of competitively superior 
value to customers ( Barney, 1991 , 1997 ; Slater, 1997 ). Second, they are resistant to duplica-
tion by competitors ( Reed and DeFillippi, 1990 ; Hall, 1992 , 1993 ). Third, their value can be 
appropriated by the organisation ( Collis and Montgomery, 1995 ). 
Resources, such as brand reputation, relationships with customers, effective distribution 
networks and the competitive position occupied in the marketplace, are potentially signifi-
cant advantage-generating resources. These have been termed marketing resources as they 
relate directly to marketing activities and are directly leveraged in the marketplace. Their 
role in generating value for customers is clear. But how easy are they to protect against 
competitor imitation (and hence erosion of that advantage)? Some resources, such as capi-
tal, plant and machinery, are inherently easier for competitors to copy than others, such 
as company reputation, brand reputation and competitive position created and reinforced 
over time. Many marketing resources, as we shall see, are intangible in nature and hence 
more difficult for competitors to understand and replicate. 
The ways in which resources can be protected from duplication have been termed isolat-
ing mechanisms ( Reed and DeFillippi, 1990 ), as they serve to isolate the organisation from 
its competition, creating a competitive barrier. Isolating mechanisms operate at three main 
levels: 
● 
First, for a competitor to imitate a successful marketing strategy it must be able to iden-
tify the resources that have been dedicated to creating and implementing that strategy 
in the first place. The competitive position created, for example, will include a complex 
interplay of resources, creating difficulties for competitors in identification. Lippman 
and Rumelt (1982) refer to this problem for competitors as ‘causal ambiguity’, which 
can be created through tacitness (the accumulated skill-based resources resulting from 
learning by doing and managerial experience), complexity (using a large number of 
interrelated resources) and specificity (the dedication of certain resources to specific 
activities). For example, a firm enjoying the resource of close relationships with key