Question of Value

Question of Value. Resources are valuable if they help organizations to increase the value offered to the customers. This is done by increasing differentiation or/and decreasing the costs of the production. The resources that cannot meet this condition, lead to competitive disadvantage. McDonald’s hold a high value in accordance to its brand image and exploitation of the available resources which had helped it evolved successfully for more than five decades.
Question of Rarity. Resources that can only be acquired by one or few companies are considered rare. When more than few companies have the same resource or capability, it results in competitive parity. The utility of the resource may be franchised oriented and spread through its breadth but the main control still remains in the hands of the top 50 management authorities. The franchises has to follow the company rules strictly to run a franchise of McDonald’s.
Question of Imitability. A company that has valuable and rare resource can achieve at least temporary competitive advantage. However, the resource must also be costly to imitate or to substitute for a rival, if a company wants to achieve sustained competitive advantage. McDonald’s may not be difficult to imitate in aspect of the product but it’s functionally is very difficult to achieve.
Question of Organization. The resources itself do not confer any advantage for a company if it’s not organized to capture the value from them. Only the firm that is capable to exploit the valuable, rare and imitable resources can achieve sustained competitive advantage. McDonald’s is always ready to exploit new resource and the organization structure is well recognized. It provides a good support to its franchise operations.


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