Strategic Factor Markets
Superior Expectations
Equal Expectations
Inferior
Expectations
Strategic Factor Market (SFM)
Resource Acquisition & Pricing
Underpriced Resources
Fairly Priced
Overpriced Resources
Above-Normal Returns
Normal Returns
Losses
Environmental Analysis
Public, replicable → No advantage
Internal Capabilities
Tacit, firm-specific → Advantage
Competitive Advantage = Buying resources below true future value
via superior expectations (or luck)
LUCK
Unexpected
gap
between
expected
and realized
value