Internal Resources as a Source of Competitiveness


Internal Resources as a Source of Competitiveness
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Introduction
Internal resources are inner assets, weaknesses, and strengths: either tangible or intangible, exhibited by an organization. The strengths are favourable factors that, when fully utilised, propel an organization to meet its objectives. On the other hand, the weaknesses are factors that may limit the company's ability to meet its objectives. Examples of key internal resources include the organizational workforce, capital resources, organizational structure, culture, and leadership. In an organization, each of the examples contributes to the strengths and weaknesses of the internal resources. SWOT analysis is among the most common of assessing an organization's internal (and external) environment (Gurel, 2017). It reveals the assets that an organization should utilize or improve to meet its objectives. More importantly, internal resources can be the cause of competitive advantage for an organization when identified, developed, and sustained. In the UK, Roll-Royce Holdings (RRH) plc is among the companies with robust internal resources whose investments and utilization of internal resources have yielded desired business outcomes (Rolls-Royce, 2021). The current paper seeks to evaluate some of the current internal resources and propose some of the company's resources to sustain and improve its competitive advantage.
Importance of Internal Resources in Enhancing Competitiveness
Michael Porter's theory of competitive advantage suggests that organizations should pursue policies that create high-quality goods and services for sale at high prices in the market. The theory suggests that successful utilization of internal resources is key towards securing a competitive edge against the competition (Pigatto & Pigatto, 2019). A competitive advantage is realized when an organization consolidates attributes that give it an edge over the competition (Hosseini et al., 2018). At Rolls-Royce, for instance, the major competitors are MAN Energy solution, Honeywell, Bombardier, and Pratt & Whitney, and General Electric (Luna et al., 2018). Each of these companies competes with some or all of Rolls-Royce's business lines: civil aerospace, defense technology, and power systems. Each of these companies has human resources, capital, and technology that rivals RRH on all fronts. Therefore, RRH must consistently evaluate and improve its internal (and external resources) to ensure that it remains at the top of the competition.
Therefore, according to the theory of competitive advantage, competitive advantage is subject to erosion by competition. Competitors also invest in research programs and are seeking talented manpower t...