What is meant by resource immobility?
and Resource Immobility is: The concept that if a resource is easy to obtain by competitors because the cost of developing, acquiring or using that resource is relatively low, then that resource cannot provide a competitive advantage.
What is resource heterogeneity?
Resource heterogeneity is a fancy way of saying that different firms have different resources. Their resources are heterogeneous – i.e., different. In many ways, this is self-evident – when you consider organizations, it is easy to see that different firms have different resources that underpin them.
What is resource homogeneity?
The resource heterogeneity hypothesis proposes that spatial heterogeneity of limiting resources and inter-specific differences in resource requirements will determine species richness.
What are the two forms of resource immobility?
One cause of market failure is the immobility of factors of production. There are two main types of factor immobility, occupational and geographical immobility. One of the main causes of unemployment is that workers lack the skills required by expanding industries in the economy.
What does resource immobility look like?
Resources are not free to move from one industry to another. This is known as resource immobility. Resource immobility is a difficult problem in any economy. The efficient allocation of resources requires that land, labor, entrepreneurs, and capital be free to move to markets where returns are the highest.
What is resource-based view theory?
The Resource Based View (RBV) of the firm starts from the concept that a firm’s performance is determined by the resources it has at its disposal. The way these resources are used and configured enable the firm to perform and can provide a distinct competitive advantage.
What is heterogeneous and immobile resources?
Competitive advantage occurs only when there is a situation of resource heterogeneity (different resources across firms) and resource immobility (the inability of competing firms to obtain resources from other firms).
What are the two major assumptions that the resource-based view RBV makes in its strategy analysis framework?
The two critical assumptions of RBV are that resources must also be heterogeneous and immobile.
What is an example of resource immobility?
As an example of resource immobility, consider the following: a firm is trying to decide whether they should buy an ‘off-the-shelf’ inventory control system or have one built specifically for their needs.
Why is immobility of resources a market failure?
Factor immobility leads to resources being underused and causing a Pareto inefficient outcome. Factor immobility is a cause of market failure. The free market fails to provide an efficient allocation of resources because of the geographical and occupational immobilities.
What are homogeneous societies?
A homogenous society is a kind of society that has similar kinds of people, especially where there are no significant ethnic differences.