COMPETITIVE STRATEGY

Strategy Is About BothResources and Positioningby Roger L. Martin

APRIL 27, 2015

Anyone taking the time to delve into the literature of strategy quickly realizes that there are

two ercely opposed camps.

In the red corner we have the positioning school (TPS) and in the white we have the

resource-based view of the rm (RBV). Michael Porter is credited with (or more often

accused of) creating TPS in 1980positing that a rm should think about positioning itself

in its industry in a way that enables it to achieve competitive advantage.

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The RBV view, rst articulated by Berger

Wernerfelt in 1984 and then by Jay Barney in

1986 and 1991, put forward a view of

competitive advantage as based on

accumulating competitive resources. The

main (though not only) criticism it levels at

TPS is that for positioning to work, market

structures have to be stableand they are not. RBV argues that in an increasingly unstable

world, the possession of valuable, rare, inimitable, and non-substitutable resources is a

more reliable key to competitive success.

To date, RBV has been winning the battle in the academic community, but its market share

in the world of strategy practice is low, despite having been taught to three decades worth

of MBA students.

Personally, I see this as just another example of how either/or is a false and unhelpful trade-

o. Real strategies in the real world combine TPS and RBV. Positioning and resources arent

opposites so much as two sides of the same coin.

Think about it. Attempting to stake out an advantaged position in a given

market/industry/arena without thinking about the resources necessary to support the

advantage is clearly a stupid idea. But equally stupid is to think that one can develop a

valuable, rare, inimitable, and non-substitutable resource outside the context of a

particular position in a particular market/industry/arena. No advantage I have ever seen is

independent of a distinctive set of capabilities and no resource that I have ever seen is

competitively valuable independent of context.

It is unarguable that you need both. You need a where-to-play and a how-to-win. They

have to be a matched pair. Strategy, at its heart, is about positioning and resources

together. The art of strategy is in toggling back and forth between the two to nd a

positioning that exploits resources to create an advantage that endures enough to justify

the resource investment in the rst place.

Roger L. Martin (www.rogerlmartin.com) is the Premiers Chair in Productivity and Competitiveness andAcademic Director of the Martin Prosperity Institute at the Rotman School of Management at the University of

Toronto in Canada. He is the co-author of Playing to Win: How Strategy Really Works and of the Playing to Win

Strategy Toolkit. For more information, including events with Roger, click here.

Related Topics: STRATEGY

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