Question

Brain Boost Inc. is a leading educational toy company. Competitors across the globe have failed to imitate Brain Boost’s production models, supply chain systems, knowledge systems, and culture. These attributes have remained unique to Brain Boost Inc. for a long time. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?

a) resource homogeneity
b) resource cost
c) resource substitution
d) resource immobility

Answer 1

Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?

d) resource immobility

Step-by-step explanation:

There are various assumptions that can be made to describe how resources are utilized in various firms. Competitive advantage as the name suggests is when one organization has a favorable position in business as compared to another company that are in competition with. The various assumptions of the resource-based model of competitive advantage are as follows;

1. Resource homogeneity

This is a situation in which a company owns a resource that is similar in characteristics to resources in other companies. A company like this cannot have a competitive advantage against it's competitors.

2. Resource cost

Resource cost can be defined as all the input costs that are to be used in the production of a product from it's raw form to a finished product. Resources include labor, materials and equipment. When the resource cost is higher than other competitors in a market, then one doesn't have a competitive advantage against other competitors.

3. Resource immobility

When a resource is not easy to be obtained by other competitors, then it is called resource immobility. This can provide a competitive advantage against other companies especially if the resource is highly beneficial.