Transforming the Firm through the Co‐evolution of Resources and Scope

The analysis of the competitive advantage of the firm is at the core of strategic management. There is a large body of literature that analyzes the relationship between a firm's characteristics and its advantage over other companies, trying to identify the firm factors that are most likely to be associated with superior performance as the embodiment of its competitive advantage. This type of analysis has led to the division of the field into two camps: the resource-based view of strategy, which views resources and their underlying imperfections in input markets as the most important factors (Penrose, 1959; Wernerfelt, 1984), and the positioning school or activity-based view of strategy, which views activities and their associated imperfections in product markets as the most important factors (Ansoff, 1965; Porter 1980, 1985). This divide among researchers is not likely to be solved unless we understand the processes that link resources and activities by which companies arrive at their competitive advantage.