NOT a step in the Resource-Based Model of Above-Average Returns?

• A. Resources
• B. Capability
• C. Competitive Advantage
• D. Market Segmentation

Answer: (D)

The main idea being tested is how the Resource-Based View identifies the internal sources of above-average returns. In this view, a firm earns superior performance by building and leveraging its internal assets—its resources and capabilities—to create a competitive advantage that is valuable, rare, hard to imitate, and non-substitutable.

Resources are the tangible and intangible assets the firm controls; capabilities are the firm’s routines and processes for deploying those resources effectively. When these resources and capabilities combine in distinctive ways, they enable a competitive advantage that sustains performance beyond rivals.

Market segmentation, while important for marketing strategy, operates in the external environment and market analysis rather than as part of the internal asset-based pathway the RBV emphasizes. It guides where to apply strengths, but it is not a step in building the internal resource-based path to above-average returns.

So, market segmentation does not fit as a step in the Resource-Based Model of Above-Average Returns; resources, capabilities, and competitive advantage do.