The Achilles Heel of Firm Strategy: Resource Weaknesses and Distinctive Inadequacies*

Two separately developed views within the strategic management literature elucidate the source of a firm’s competitive advantage based on the internal attributes of the firm: the resource-based view (Wernerfelt, 1984) and the distinctive competence view (Selznick, 1957). As developed in the literature, however, both views neglect important dimensions which inhibit the achievement of competitive advantage. These dimensions are resource weaknesses and distinctive inadequacies. Accounting for weaknesses and inadequacies exposes important choice-sets confronting management in making resource investments, and of time-related dimensions in developing sustainable advantage. Considering the effects of weaknesses and inadequacies provides insight on the limits to firm growth and to sustainability of competitive advantage. Theory on developing competitive advantage may lack explanatory and predictive power if it excludes these perspectives, which if included may also improve prescription for practitioners.