Resource Based View and Sustainable Competitive Advantage: An Investigation Among Cellular Mobile Operators

Abstract

Over the past two decades, the Resource Based View (RBV) of the firm has emerged as one of the leading paradigms in the field of strategic management. However, the theory has been subjected to a number of criticisms, particularly because the vast majority of contributions within the RBV have been of a conceptual rather than an empirical nature. Empirical research on strategic resources and their impacts on firm performance are scarce. Despite extensive discussion grounded in RBV theory, its fundamental tenets still remain to be validated in the field. In order to examine the relationship between strategic resources and superior performance empirically, Cellular Mobile Operator (CMO) industry was chosen with empirical research method. In order to achieve the objective of the study, the strategic resources which contribute significantly in creating distinctive customer value and superior performance are studied in Indian CMO organizations. The research design used both deductive and inductive approaches. Deductive approach uses RBV and Sustainable Competitive Advantage (SCA) framework developed in general to provide framework to achieve sustainable competitive advantage and superior performance for CMO firms. Inductive approach explores industry specific strategic resources, attributes of cellular mobile services and customer value dimensions for cellular mobile services. This research used data triangulation which includes questionnaire for customers, questionnaire for executives, archival records and documentation. Competitive dynamics in Indian cellular mobile operator industry is so intense that every participant is striving to gain an advantageous market position. The need of the hour is to identify those resources that cater to customer needs and wants and translate them into services that generate value to the subscribers. The research identified six strategic resources from the literature review for cellular mobile operators. Strategic resources that contribute to attain sustainable competitive advantage for CMO firms are human capital, customer capital, location capital, reputational capital, process capital and innovation capital.Sustainable competitive advantage is a function of attribute differentiation that drives distinguished customer value. It was discovered from the literature review that usefulness, ease of use, network size, compatibility and complementary service variety are attributes of cellular mobile services that drive customer value. Customers prefer services from that service provider who creates and delivers them better value in the market. The customer value dimensions for cellular mobile services that subscribers consider while assessing the value of services are functional value, social value, emotional value, conditional value, epistemic value and monetary value. The findings revealed that: (1) there is a significant positive relationship between strategic resources and superior performance, (2) among the attributes of services, complimentary service variety has the highest influence on customer value, and (3) among the customer value dimensions, monetary value has the strongest effect on superior performance in cellular mobile services. Thus the results of the study can be used as a guiding tool by managers to identify, develop, protect and deploy strategic resources for CMO firms to achieve superior performance. Further, from the managerial perspective, this thesis highlights the importance of strategic resources to achieve superior performance, creation of new value added services and their contribution in creating and delivering customer value in CMO firms. The results of the study give guidelines for managers about which attributes need to be emphasized in cellular mobile services to create better customer value. Finally, the study integrated strategic resources, attributes of services and customer value dimensions and developed a holistic RBV and sustainable competitive advantage framework for cellular mobile operator firms to achieve superior performance.