Competing on Resources—Why Resources Still Rule Strategy

Every company likes to think its strategy is the sharpest tool in the shed. But the truth is, advantage doesn’t come from clever PowerPoints — it comes from the resources you’ve built and protected. Not just cash in the bank but also the kind of assets, capabilities, and intangibles that are hard for rivals to touch.

Think of Apple’s design ecosystem, Nvidia’s chip architecture, or Netflix’s recommendation engine. These aren’t easily copied, and that’s the point.

The Five Tests of a Truly Strategic Resource

For a resource to matter strategically, it must clear five challenging hurdles:

1. Inimitability — Hard to Copy
   If your competitors can grab it off the shelf, it’s not a moat. Tesla’s supercharger network and battery R&D aren’t impossible to replicate, but the head start is measured in decades, not quarters.
2. Durability — Slow to Decay
   Technology ages fast, but brand trust and ecosystems endure. Think about Amazon Prime. Launched in 2005 as a shipping perk, it’s now a durable loyalty engine that has outlived multiple retail fads.
3. Appropriability — Who Captures the Value?
   Having a resource is one thing; keeping the value it generates is another. OpenAI’s GPT models are powerful, but the company ensures value capture through API access and enterprise contracts, rather than letting all the benefit flow to partners.
4. Non-Substitutability — Not Easily Replaced
   When Zoom took off during COVID, Microsoft Teams and Google Meet were quick substitutes. But Adobe’s PDF standard? No real replacement. Substitutability is the silent killer of strategy.
5. Competitive Superiority — Better than the Rest
   It’s not enough to be good — you need to be better. Nvidia’s dominance in GPUs isn’t just about making chips; it’s about a whole ecosystem of CUDA software and developer adoption that competitors struggle to match.

Investing in the Crown Jewels

Even the best resources depreciate. Leaders must act like guardians of the company’s crown jewels, reinvesting constantly.

• Microsoft didn’t stop at Office — it rebuilt the franchise around the cloud with Office 365.
• Netflix plowed billions into original content once it realized licensing wasn’t durable.

Upgrading Beyond Today’s Strengths

When existing resources hit limits, new ones must be built.

• Salesforce saw that CRM alone wouldn’t hold the moat, so it built an ecosystem of cloud apps and analytics.
• SpaceX leveraged rocket engineering into Starlink, moving from launches to global infrastructure.

Leveraging Resources into New Arenas

The real strategic magic is extending resources into adjacent spaces without overreaching.

• Apple turned its design and ecosystem into wearables (AirPods, Apple Watch).
• Amazon stretched logistics and cloud infrastructure into AWS, now its most profitable business.

But beware overconfidence: Google Glass and Meta’s early VR bets remind us that not every extension works.

The Strategy Imperative

The resource-based view isn’t a fad — it’s a reminder that lasting advantage comes from what you own, know, and can do better than anyone else. Strategy, then, is less about chasing trends and more about asking:

• Which resources do we truly have that others can’t match?
• How do we protect and grow them?
• And where can we extend them into the future without diluting the core?

Companies that continually invest, upgrade, and thoughtfully leverage their resources — think Nvidia, Amazon, Apple — will keep writing the playbook. Those who don’t risk becoming the next case study in strategic decay.