Worlds Apart? Connecting Competitive Dynamics and the Resource-Based View of the Firm

Competitive dynamics and the resource-based view emerged simultaneously from the study of strategy more than three decades ago. The two subfields have advanced since then to occupy established positions in strategic management. Generally, competitive dynamics is outward-focused and interested in a firm’s moves and countermoves in the marketplace. The resource-based view looks inward, examining a firm’s internal organizational capabilities, its tangible and intangible resources. They have mostly been investigated independently; rarely have researchers put together the two pieces of internal capabilities and external competitive profile. Consequently, we have only a fragmented snapshot of the firm's core strategic elements and behaviors. Here, we compare and contrast the two perspectives along a number of dimensions such as focus of attention and conception of competitive advantage. Based on this understanding, we explore the CD-RBV interface, specifically how central elements of these research streams may be considered jointly to expand our understanding of firm behaviors and outcomes. We highlight limitations and lapses in the literature and suggest directions for future researchers interested in developing new theories connecting the intellectual boundaries of these two important strategy subfields.