To answer the question of how to support a competitive strategy, it’s important to consider the concept of the resource-based view of the firm, and the three key types of resources: tangible resources, intangible resources, and organizational capabilities. Determining whether the internal resources are valuable, rare, difficult to imitate, or difficult to substitute (VRIN) can help a firm sustain a competitive advantage. See Chapter 3, Exhibit 3.6. eBay’s profile might look like this:

Tangible Resources:

Financial – strong financial growth

Physical – unknown, but not that essential a resource in a service business

Technological – assumed very strong, given the nature of eBay’s business model, and its success

Intangible Resources:

Organizational – centralized decision-making worked well except in Asia

Human – based on the commitment and loyalty of Whitman & Donahoe, very capable and dedicated human resources

Innovation – major strength

Reputation – another major strength – essential in this service business

Organizational Capabilities:

Competencies – eBay had the critical strengths in its human, technological, innovative and reputational resources that should allow it to sustain a competitive advantage with its chosen business model