Resource-based view of social media as a source of sustained competitive advantage

Abstract

Executive summary: Social Media is increasingly becoming prevalent and firms are increasingly adopting social media. Managers are concerned about the value social media provides and how it can be used for competitive advantage. The resource-based-view of a firm suggests that resources that are rare, valuable, imperfectly imitable and non-substitutable can create sustained competitive advantage. This thesis uses the resource-based view of the firm applied to five case studies of Wiki implementation and analyzes how social media could create sustained competitive advantage. The analysis in this thesis finds that social media can be used to enhance existing resources and capabilities in a firm. These organizational capabilities are hard to imitate because of path dependency, social complexity and causal ambiguity and thus provide the firm sustained competitive advantage. The effective implementation of social media by a firm requires that it identify its core capabilities and resources to enhance, identify the gap that exists between the needed capabilities and the capabilities the firm possesses and then systematically embed social media in the daily routines and processes of the organization. This can be done by adopting appropriate social media guidelines, training and policy enforcement. Adopting social media by itself will not confer a firm sustained competitive advantage but capabilities thus enhanced could confer a firm sustained competitive advantage.