Business strategy has come a long way in the past several decades. In the 1980s, the holy grail of sustainable competitive advantage was thought to stem from positioning the firm against a set of five or so industry-level forces, including returns to scale, switching costs, and other entry barriers. (This view was popularized by Michael Porter at Harvard Business School.) In the 1990s, Jay Barney and others began developing what has become known as the resource-based view (RBV) of the firm. They argued that internal factors—i.e., firm-specific resources that are valuable, rare, inimitable, and non-tradable—were more important in sustaining a competitive advantage than Porter’s external forces.
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