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In: A General Theory of Competition: Resources, Competences, Productivity, Economic Growth

Chapter 6: Resource-Advantage Theory: An Evolutionary, Process Theory of Competition

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Resource-Advantage Theory: An Evolutionary, Process Theory of Competition
Resource-Advantage theory: An evolutionary, process theory of competition

Competition is the constant struggle among firms for comparative advantages in resources that will yield marketplace positions of competitive advantage for some market segment(s) and, thereby, superior financial performance. For resource-advantage theory, (1) competition is disequilibrium provoking, and (2) both innovation and organizational learning are endogenous. That is, the process of R-A competition is status quo disturbing and leads to both innovation and learning. The pursuit of superior financial performance, for example, more profits than last year, ensures that rivals will engage in actions, including innovations, that disrupt any stasis that might temporarily occur.

This chapter begins by explicating the process of R-A competition and showing how it leads to innovation ...

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