Combining Resources and Capabilities between Media Companies and Internet Portal Companies

Companies in industries that undergo rapid technological and conditional change commonly experience gaps in their set of resources and capabilities. The purpose of this thesis is to understand and explain the combining of resources and capabilities of the media industry and the Internet portal industry, in order to fill certain resource and capability gaps. We will go about this task through analyzing resources and capabilities within a company from each industry. The theories we have used are strategy theories regarding competitive advantage, mainly based on the Resource Based View (RBV) of strategy. This view emphasizes that the key to develop a successful strategy is to exploit the unique bundle of differentiated resources and capabilities of each firm. Within this framework we use a model developed by Grant (1995), in order to identify and evaluate the two chosen companies’ resources and capabilities. We also take the RBV a step further resulting in what Regnér (1999) calls the Dynamic RBV, which takes into consideration the necessity of constant renewal of capabilities to respond to shifts in the business environment. This view helps us investigate if the two companies have an inability to renew competencies, which may result in resource and capability gaps. In order to be able to analyze the resources and capabilities, it is necessary to identify the key success factors for both industries. We have chosen to do this in chapter 4 through a brief industry analysis based on Porter’s five forces. We also present two possible future scenarios of how a converged market could look like, since the key success factors are influenced by the outcome of the market development. The empirics chapter 5 is structured as Grant’s (1995) model presented in the theory part, and distinguishes and evaluates the resources and capabilities within the two firms. This analysis results in the identification of possible resource and capability gaps. We find that both companies possess extensive resources and capabilities that could provide competitive advantage. However, several of these could also generate a resource/capability gap within the company. We also discover that some resources and capabilities within one company could fill a gap within the other company. In our last chapter 6, we analyze our findings from the empirics chapter. We answer why the resource and capability gaps have occurred and how they could be filled. Each company possesses resources/capabilities that could fill a gap within the other company. We conclude that, under the assumptions made in chapter 4, there is logic of combining companies’ resources and capabilities from these two industries, but more for the portal to gain than for the media company. Authors Comment: We have found this area of research is very complex. There are several theories and models, which in different ways approach the issue of resources and capabilities. However there are quite few that discuss resources and capability gaps, and those that exist, are sometimes complicated. We have tried our best to adapt the theories to our case study but since the two industries that we have looked at are quite different, it is has proposed difficulties at times. We think that this has made the task of completing this thesis more complex – but also more interesting. Combining Resources and Capabilities between Media Companies and Internet Portal Companies Bennet & Hellström