Apparently when Apple won the patent case against Samsung and demanded payment of $1 Billion, Samsung paid up in full in 30 trucks full of 5c coins.
Resource Based Strategy is based in heterogeneity
Samsung and Apple offer similar products in the mobile and tablet market, based on completely different competencies. Apple has built a brand following around innovation and coolness allowing the organisation to sell its products at higher prices. Samsung has chosen to follow. The price of following includes the payment of fines for breaking patent.
With a resource based strategy the leadership decide how they can put their people and resources together to take advantage of market opportunities or deal with threats.
Resources may be tangible or intangible. Tangible resources are likely to appear on a balance sheet. These include land, buildings, machinery, equipment and capital. Intangible resources are the real source of competitive advantage. Intangible resources include brand reputation, trademarks, intellectual property, individual skills and team capabilities. The level of engagement of your staff is an intangible resource.
Different organisations use different resources to compete for the same market. This sounds obvious. However, as we prepare our competitive strategy it is easy to fall into a trap of thinking that our competitors will approach the market in the same way we do.
Setting a Resource Based Strategy depends on market information
Do you know your competitors resources? Can you describe the capabilities these resources create as they work together? Sustained competitive advantage may be established when the resources are:
- Valuable: Better than the competition in creating customer value.
- Rare: In short supply.
- Inimitable: Hard to copy
- Non-substitutable: Competitors cannot find easy ways to substitute for the resource.
- Durable: They do not rapidly depreciate. .
- Complementary: The resources can be grouped to create value.
- Controllable: Your organisation can control the value these resources create.
- Complementary: The resources work together to create value
Complementary resources generate significant customer value by performing better than the competition in discrete activities. This allows you to charge premium prices. These competencies may be used for other business opportunities. Therefore the resources deliver a competency. These are your ‘Core Competencies’.
There are well described ways in which resources or competencies are difficult to copy. These include:
- Physical uniqueness: such as legal rights of ownership, patents and distinctive characteristics.
- Path dependence: When resources created over time through nurturing, training and particular experiences.
- Causal ambiguity: When the root causes of valuable outcomes are hard to define.
- Economic deterrence: You may know what the resource is and can pay the cost of copying it but realise the market cannot support two players.
Competitively valuable resources are rare. It is worth nurturing, investing in and upgrading your resources. However as you leverage your resources, beware of overestimating your capacity to compete and how transferable a resource may be from one challenge to another. The same resources, applied outside of your organisation may behave in very different ways.
Be careful of misrepresenting your generic resources as ‘rare’. You may be building your campaign on skills anyyone can duplicate. Misrepresenting our insights is easy. As easy as believing what we read.
Did Samsung really dump on Apple?
Did Samsung really pay in coin? For Samsung to pay in 5c coins would have required 20 billion coins. This would require:
- Collecting all of the coins struck in the US Mint in the last few decades.
- Collecting almost all 5c coins in circulation.
- Transporting 110 000tons of coins which would require the services of at least 2 755 eighteen wheeler trucks.
- Four and a half Olympic swimming pools of copper alone.
And even if Samsung went to all this trouble, Apple would be in their rights to send the trucks back to Samsung and demand reasonable payment. And finally: this was not a ‘fine’ as the amount is not payable to government. Strictly speaking, these are ‘damages’.
As noted on El Deforma, the Mexican website who posted the news:
“Si vas a plagiar noticias, no uses un sitio de noticias falsas como fuente.”
Or In English:
“If you’re going to steal news, make sure not to use a fake news site as a source.”
Or
