According to the resource-based view of strategic management, a firm can gain a competitive advantage by gaining access to strategic resources. This begs the question of what a strategic resource is. When developing a firm's strategy, managers should understand the three basic strategic resources and how they can be used.
A firm's human resources are, quite simply, the employees that it has at its disposal. Having the right employees can provide firms with a competitive advantage. For example, a firm may recruit the best and brightest scientists for its research and development department or the top business school graduates for its management team. Firms need to manage their human resources, both by recruiting the kind of employees that they need and by retaining their best staff.
Capital resources are resources that a company uses in the production of goods such as factories and equipment. Capital resources can provide a firm with a competitive edge in the marketplace. For instance, if a firm has specialized equipment that allows it to produce goods more efficiently, its production will be faster and less costly than the competitors. Capital resources can be expensive and time-consuming to obtain, making it difficult for competitors to gain them.
Natural resources are resources that naturally exist in the environment, such as oil, fresh water, minerals or arable land. Natural resources cannot be created, so a firm has an advantage if it operates in a country where these resource exist. Firms can obtain natural resources, however, by entering new countries. For example, many foreign oil companies have entered Middle Eastern countries to access their oil reserves.
To be successful, firms must manage and balance all three strategic resources. It is not enough to have access to just one resource. For example, if a lumber company has access to the natural resource it needs -- forests -- it still needs capital resources to manufacture the lumber and skilled workers (human resources) to harvest the trees and mill the lumber. Although some strategic resources may be more important for specific companies, they must remember to invest in other strategic resources as well.