A Property Rights Perspective on Competitive Strategy

We argue that the property rights perspective, as developed by economists such as Coase, Alchian, Demsetz and Barzel, is uniquely positioned to inform and further the understanding of competitive strategy. This is because of its consistent focus on the capture and protection of property rights as a main explanatory principle; a principle that we argue may also be usefully applied to the study of firm strategy. In our view, all firms trade resources spent on capture and protection off against value creation. Strategizing concerns changing the tradeoff to the advantage of the firm by identifying and influencing impediments to value creation. We use these insights to derive a number of refutable propositions, and argue that key insights from both industrial organization economics and the resource-based view are consistent with the property rights perspective.