If the cost of the acquisition exceeds the cost to other firms of accumulating comparable resource stocks, the transferring of resources and capabilities will not create long-term competitive advantage.

Question

Quizplus · Accepted Answer

This statement is consistent with the resource-based view of the firm, which suggests that sustainable competitive advantage is based on the possession of valuable, rare, inimitable, and non-substitutable (VRIN) resources and capabilities. If the cost of acquiring these resources exceeds the cost of other firms of accumulating similar resources, then the acquiring firm may not be able to generate returns that justify the expense of the acquisition. Additionally, if the resources and capabilities are not VRIN, then they may be easily imitated or substituted by other firms, reducing their value and limiting the potential for sustained competitive advantage.

If the Cost of the Acquisition Exceeds the Cost to Other