Is the Resource-Based View Still Strategic? A Critical Reassessment of Its Strengths, Limitations, and Relevance in the Era of Digital Transformation and Dynamic Capabilities

This paper revisits the resource-based view to understand its value and limits in explaining how firms gain and sustain competitive advantage. The RBV argues that firms succeed when they have resources that are valuable, rare, hard to copy, and without substitutes. We explore the strengths of this theory, including its usefulness in explaining why some firms perform better than others. Industry examples, such as Apple and Google, help show how internal resources play a strong role in business success. However, we also highlight key criticisms. These include the RBV’s limited attention to external factors, its overly static nature, and the problem of calling a resource “valuable” only after success has already been achieved. We discuss how newer frameworks like the Dynamic Capabilities Approach and the Market-Based View help address these issues by focusing on adaptability and external conditions. The paper argues that RBV is still useful but not enough on its own. It works best when combined with other perspectives that explain how firms respond to change and industry forces. We suggest future research should look more closely at how firms build, measure, and manage intangible resources like knowledge and culture, especially in fast-changing, digital, and global environments. In conclusion, while the RBV remains important, it must evolve to stay relevant in today’s complex world of strategy.