The Resource-Based View (RBV) Competitive Advantage of Firms in The Context of Industry 4.0

The Resource-Based View (RBV) Competitive Advantage of Firms in The Context of Industry 4.0 Manh Dinh Phan Matsui Yoshiki Department of Business Administration, Yokohama National University Abstract Resource-based view strategies have attracted the attention of many academicians, however, under the new context of Industrial Revolution 4.0, the factors, namely the resources and capacities of firms, should be audited in order that the updated characteristics will be clarified in this new context The qualitative method with the emphasis on analyzing the current available online sources is the key data of this paper The findings show that there have been many changes in the way the functions in the value chain of the company operate, including marketing, human resource management, supply chain management and finance management The changes needed for the Industry 4.0 have been summarized into two most important key success factors in the IR 4.0 They are the information technology capacity and new relevant skills for talent Other specific strategies to upgrade and leverage resources and capacities have been suggested The paper, however, has limitations due to time pressure and data collection method that need more deeply quantitative and qualitative researches to triangulate outcomes while many drawbacks of IR 4.0 should also be identified and addressed Keywords: Resource-based view, strategy, Industry 4.0 Introduction 1.1 Strategic Management In The World Of Business Strategic management has long been the traditional activities in many areas, especially in business fields throughout the World, of which the Asian references of Japan, South Korea, Taiwan and later China seem to be very interesting cases Normally, as firms from the earlier players of more advanced economies, strategic management is sometimes considered not very necessary for them to pay attention to; however, with the rigorous competition from the new players in the markets, especially from emerging economies, the process of strategic management has received the notification from these firms For the companies from late-comer economies, especially the startups and SMEs, the strategic management is even more vital to stay alive and catch up with the big players in the markets Accordingly, the process of development of the companies from late-comer economies has seen the role of the strategic management activity when they must catch up with the early birds from advanced economies of the US and EU with the market assertion and technological advancements by the intensive strategies 1.2 Strategic Management In The Industry 4.0 And The Role Of Internal Resources And Capacities The Industry 4.0 will bring a great number of changes in terms of structure and methods of operation and doing business of firms For instance, under the development of Internet and platforms, the firms that is small but strong in terms of Internet-based technology can compete without the possession of the abundant of human resources or the location advantage as the traditional firms Booking.com and Skyscanner.com are the 704 examples for this case Thus, the strategies of new firms need to be oriented to this fashion while those from the traditional companies are also required to redirect their business operations and strategies to this trend to take the advantage of current and future markets However, to have the competitive capacity, companies must accumulate the internal resources, especially the ones relevant to technological and digital economy, to develop in these more competitive markets From this trend, this paper will try to clarify factors related to internal capacity, or resource-based view of the firms, which can help companies emerge and develop in the context of IR 4.0 Literature Review 2.1 Resource Based View And Framework For Analysis The process of strategy management has been prevalent with the two viewpoints of Resource-based view and Market-based view While Market-based view school is popular with the analysis of external environments to create the competitive advantage for the firms, the resource-based view school focuses on employing and leveraging the internal possessions to stay competitive in the market The key authors of MBV school can be mentioned as Michael Porter, Andrews, Ghemawat while the representatives from RBV can be attributable to Grant and Barley and then Hamel and Prahalad in their book ‘Competing for the Future’ (1996) According to RBV school, firms hold a bundle of resources, which can be combined, thus differentiating them from others and helping these firms gain competitive advantage over the competitors in the market To analyze and update the application of RBV thoughts into the present trend in business analysis of Industry 4.0, the framework for the traditional RBV school will be analyzed as the foundation for the finding stage of this paper The resources, capacities and competencies are the key terminologies need clarified as the foundation for the analysis of Resource-based view strategies of the companies All factors relevant to competitive advantage and sustainable competitive advantage of firms will be based on their potential to create the internal resources and capacities of firms Firstly, according to RBV school, resources are a firm’s assets that formulate the basic conditions for the development of firms They compose tangible assets, such as its factory, equipment, finances, and location, human assets, namely number of employees, their relevant skills, and motivation, and intangible assets such as its technology (patents and copyrights), culture, and reputation Capacities are defined as the capacity of firm to exploit its resources They can be business processes and methods that coordinate the interactions among these resources to transform them into products/outputs A capacity is dependent on a certain function Therefore, there are marketing capacities, manufacturing capacities, and resource management capacities and the like A competency is a cross-functional integration and coordination of capacities A core competency can be created via the accumulation of competencies that can be traced back through the widespread of corporation and is considered as the factor that can help companies outperform over other companies in the market Thus, the company must find the way to maintain the competitive advantage in the market to avoid the risks of becoming inefficient in the markets, or the situation of the products and technologies becoming obsolete that can turn the strengths into the weaknesses When core competencies are outstanding in comparison with the current players, they are called distinctive competencies 2.2 Competitive Advantage And Sustainable Competitive Advantage Competitive advantage based on resource-based view has attracted the attention of many academicians For instance, Lippman and Rumelt’s (1982) defined that a sustained competitive advantage is an advantage that continues to stay stable after efforts of others to duplicate the advantage have ceased Followingly, Barney 705 (1991) generalizes sustained competitive advantage as a non-duplicatable advantage According to Barney (1991), a resource must fulfill ‘VRIN’ criteria to provide competitive advantage and achieve sustainable performance Valuable (V): A resource becomes valuable if it can create strategic value for the company Specifically, this means that it can assist the firms with taking advantage of the market opportunities or avoiding the negative effects from the threats If it does not complement any value for the company, then there is no value and motivation to own these resources Rare (R): The resource is rare when it must be hard to be identified by the current and potential rivals of the firm and thus, resources will be able to become precious or unique to provide competitive advantages for firms holding them Accordingly, resources which are owned by many firms in the market cannot offer the competitive advantage since they cannot lead to the formulation of unique and effective business strategies when compared to other players in the market Imperfect Imitability (I): This is to clarify that making a copy or imitation of the resources will not be feasible The barriers can be very various such as the difficulties in accessing the resources, ambiguous relationship between capacity and competitive advantage or the sophistication of the resources Resources are considered as sustained competitive advantage only when other firms that not possess them are not able to get access to them Non-substitutability (N): This characteristic can be achieved when the resources cannot be replaced by another resource This means that the competitors cannot gain the same outcome by substituting this resource with the alternative ones In general, it is generally easy to catch up with and imitate another company’s core competencies or capabilities if they originate from explicit knowledge, or in another word, knowledge that can be easily communicated This is the type of knowledge that competitive intelligence activities can quickly be approached and leaked Tacit knowledge, in contrast, is knowledge that is difficult to be communicated since it is deeply imprinted in employee experience or in an organization’s culture Tacit knowledge is more valuable and more likely to lead to a sustained competitive advantage than the explicit knowledge because it is much more difficult for competitors to imitate 2.3 How can we analyze the resources and capacities? From the above analysis, as can be seen that the resources and capacities can be analyzed and dug out via analysis of functions of value chain of the companies including the marketing, finance, human resources, operations and the like Therefore, resource-based view analysis is very relevant to analysis of these functions and strategies related to internal resources are also dependent on strategies of these functions 2.4 Introduction To Industry 4.0 Industrial revolution 4.0 has emerged as the key terminology in many industries They are supposed to have a great impact on many areas and will be able to bring both the challenges and opportunities to business as well as people illustrated by Professor Klaus Schwab, Founder and Executive Chairman, in the World Economic Forum (2016) According to Professor Schwab (2016), for the supply side, many areas will witness the development of innovations and advanced technologies that will lead to the new ways of satisfying the present customer demands The new way of organizing the value chains can come from agile and innovative systems with new competitors when firms can get access to global Internet-based platforms via the whole functions of business such as R&D, marketing, and so on On the demand side, the transparency, consumer participation, and new trend of consumer behavior also create the new thoughts of designing, marketing as well as delivering products to customers Thus IR 4.0 will be expected have a great influence on business operation and enterprises 706 2.5 The Gap On The Literature Although RBV school still plays an important role in business analysis in terms of academic and real business practices and IR 4.0 is also one of the most reminded terminologies when it come to the analysis of business, there is a limitation of researches that link these two ideas together Specifically, there is a lack of papers updating the characteristics of the resources and capacities (from RBV school) in the context of IR 4.0 What are they? Why should we have them? and how can we achieve them? These are the questions that are raised and are in an attempt of the paper to answer Methodology The paper will employ the qualitative study method with the focus on analyzing the present literature and study cases on RBV and Industry 4.0 The research described in this paper has largely been carried out via a desk-based study utilizing various types of literature as primary data sources, ranging from scientific papers, journals, articles, magazines, newspapers, business reports from companies, consultants’ reports, Social media to YouTube videos Throughout the development of this paper, the current state of scientific publications is regularly reviewed to identify any work being undertaken in a similar focus area Specifically, this paper aims at analyzing the present application of internal analysis of firms` resources and capacities to compete in the business environment in the context of Industry 4.0 Many questions on how to take advantage and leverage the present RBV resources and capacities in order that firms, especially the SMEs and startups from emerging economies, can survive and develop in the context of Industry 4.0 are raised Additionally, other questions on how to build and develop new resources and capacities in order that these firms can outperform in the markets in the future context of competition are mentioned The paper will then give the practical and, to some extent, theoretical implications in the niche of Resource based view and Industry 4.0 Results And Findings 4.1 What are the latest foundation technologies in the industry 4.0? The Industry 4.0 have the critical impacts on many industries from service sectors to manufacturing one with the four specific foundations as described by Capgemini Consulting in an annual report (2014) These foundations comprise mobile, cloud computing, advanced analytics and machine-to-machine communication Mobile Foundation: According to the report, mobile technologies include all wireless communication platforms and systems that can help mobile gadgets connected to the Wi-Fi or Internet systems and technologies In the age of digitization and mobility, mobile gadgets will become the platforms for many business transactions Cloud Computing: As the report described, cloud computing will help business activity accessible by stakeholders when there is the data available everywhere and the easy access to the Internet A great amount of data and information will be stored and analyzed and applied based on this technology Advanced Analytics: This technology will operate based on the analysis of the data and information accumulated via the computer systems As the businessmen comment possessing data mean possessing golds Machine-to-Machine Communication: This is the achievement of Internet of Things technology Accordingly, all machine can communicate with each other via the internet-based and automatic systems This technology has the great application potentials in the fields of logistics and manufacturing 4.2 Specific Strategies For The Functions (Resources And Capacities) Of The Company In The Industry 4.0 707 The Industrial Revolution 4.0 with the new technologies and advancements have brought many changes throughout all functions of value chain of the companies In general, most of the industries from the digital based ones like online shopping websites and services in cases of hotel or airline booking to the highly raw material based and manufacturing industries like crude oil or coal see the impacts from Industrial Revolution 4.0 albeit with the different extent 4.3 Impacts of IR 4.0 on Marketing Strategies As Philip Kotler (2017) mentions in his book of Marketing 4.0, marketing function is considered among the areas strongly impacted by Industry 4.0 Marketing managers of the firms thus need to understand that there is a shift of market trend in marketing from vertical to horizontal, from exclusive to inclusive and from individual to social Especially social media will leverage the connection and communication between people and companies to create and innovate via coordination and cooperation In a traditional way, marketing functions always follow the activity of segmentation, dividing the market into homogeneous groups with reference to geography, demography, psychography and behavior In the digital age, customers are linked to each other in the forms of society and community Thus, communities become the new business segments and the companies need the permission to these segments if they want to involve in them And the companies with relevant brands must interact with these communities as friends in a harmonious style not just the one-way advertising campaigns as usual For the way of doing business, even for the firms operating under the Business-to-Business (B2B) or Business-to-Consumer (B2C) forms, customization capacity is an indispensable asset of this Industrial Revolution that will bring together the B2B and B2C perspectives Firms are required to be closer to their customers and even more reactive in identifying and translating their needs, through deeper customer’s interaction and participation at the value chain level - in designing and the accelerating processes of products In this way, the latest technologies are making the transformation of the buyer-seller relationship, both under the forms of the B2B and the B2C, weighing the firm’s readiness to quickly respond to the customer desires In general, under the context of Industry 4.0: “Marketing 4.0 is a marketing approach that combines online and offline interaction between companies and customers In the digital economy, digital interaction alone is not sufficient In fact, in an increasingly online world, offline touch represents a strong differentiation Marketing 4.0 also blends style with substance While it is imperative for brands to be more flexible and adaptive due to rapid technological trends, their authentic characters are more important than ever.” — Kotler describes his approach As can be seen that, the traditional characteristics of marketing of offline and differentiation are not obsolete, instead they need to be leveraged in parallel with the accumulation and development of new characteristics and capacities of rapid adaptation to the customization and online and digital presentation of the firms in the market to meet the requirements of new age 4.4 Impacts of IR 4.0 on Human Resource Strategies In the new context of IR 4.0, human resource management is not only required in terms of the new skills and abilities of talent but also in forms of other aspects of workforce management including recruitment, training and the using these talents Accessing and Recruiting the Potential Talent: Under the co context of digital age of social media, the companies get access to the potential candidates via means of media like Social media profiles, videos uploaded and the like to triangulate with the hard papers like CV sent to the recruiters Artificial Intelligence is on the way to renovate how resumes are approached, or on the way of searching the same number of resume pools With neuro-linguistic programming technology that is used to make predictive analytics, recruiters can get insight into the analysis of the success history of an individual candidate in a certain job position and then 708 evaluate the sources of available candidates to recognize the most appropriate people with the suitable skills and experience With video-based interviewing, the records of appearance, facial expressions, reactions to the questions and so on could be checked and evaluated to confirm the personal creativity, teamwork, knowledge, and intelligence of that talent The Assistance of Virtual Reality: Onboarding of human resource management activity will be enhanced in terms of the effectiveness and consistency with the assistance of Virtual Reality Employees could join the office tour via their mobile gadgets individually; they could say hello to their coworkers, participating in the meeting or conference hosted by leaders via this mobile gadget The time for reviewing PowerPoint presentations or following speakers will not be the problems for the employees Replacing Some Tasks by Implemented by Workforce: With the help of the robotics and machine-tomachine learning, many repetitive activities by the human can be conducted by the robotics or machine These activities may include chasing the account receivable or inventories or making invoices This goal can be achieved with the development of Robotic Process Automation when this new technology can learn how to implement the same repetitive jobs of the human without mistakes but in a more productive way Besides, the programmed software can also conduct the activities of answering the phone calls or email messages with the speed and an accuracy level like that of the real human resource Personalization of Training System: With the development of Artificial Intelligence, many training and learning activities of each employee will be programmed and adapted to the suitable speed, productivity and work schedule of that person in order that he/she can organize his/her study/work schedule personally and effectively (This cannot be achieved with the traditional training and learning system because the trainees and learners must follow the common courses or programs designed for all people with fixed schedules and progresses) Coursera.com or Ted Talk on YouTube are good examples of facilitating the customized services for employees Measurement of HR Performance via Intelligent Machines: The Internet-based and advanced technologies can transform people progress, assisting supervisors to evaluate the contributions from the workforce in terms of individual job or teamwork with the appropriate accuracy and the data variety They can also enable supervisors to follow the performance of employees with a more transparent and impactful manner because measurement activity can be more closely interconnected in time to the certain outcome being assessed objectively by machines 4.5 Impacts of IR 4.0 on Finance Strategies According to a report by Ernst & Young (EY) Consulting firm (2017) the context of IR 4.0, the finance activity is also impacted and thus needs the adaptation to create new capacities and processes in order that this function can be well prepared for this new age Internet-based achievements, such as analytics, cloud and robotic process advancements are on the way to enable the finance and accounting function to contribute much more value to the business operation in a faster way than the current capacity of firms can perform This can be seen under the achievements of increasing in real time, at a huge reduction of cost, with higher degrees of automatic coordination and lower probability of risk Generally, specific technologies have the certain roles in the accounting and financing function Artificial Intelligence can help managers exploit large structured and unstructured data sets It is possible to master the patterns of financial activity and has the ability of learning and adapting to new accounting or tax rules Artificial Intelligence is also likely to generate detailed discoveries into the financial numbers while blockchain and cryptocurrency technology is in its initial lifecycle and therefore it is also likely to threaten much of today’s common fashion of how we operate our business These advancements may influence the scale of financerelevant activities, as well as assisting a shift to its position in the business and the value it offers Analytics based on a huge amount of data can facilitate the financial function by offering the tools to get insight into the 709 value of business operation more easily and quickly than the current way This also helps the organizations forecast the outcome of operation to have a better understanding of key decisions in terms of financial impact At the same time, cloud technology can help firms engage in a connected, flexible and dynamic financial network, instead of an old-fashioned, fragmented and fixed system That can help managers trace back to the financial status very quickly and effectively However, the risks from these systems also emerge, ranging from data security and compliance in various regulatory systems 4.6 Impacts of IR 4.0 on Supply Chain Management Strategies Because the requirements for highly-customized products and services are seeing the upward trends in the market, the operations and logistics must be modified to meet this changing condition However, the sophistication of this system has caused many difficulties when it cannot be implemented in a normal plans and practices Operations and logistics in the Industry 4.0 is relevant to the similar situation of as Smart Services and Smart Products which can conduct roles which ordinarily are implemented by people “Smart Logistics” is a logistics network, which can promote the flexibility, the modification to the market fluctuations and will bring the company to the outstanding solutions to approaching the customer demands This will create the environment to enhance the quality of customer service, the customization of the production process and reduce the prices of input and output storage and production activity Since the “Smart Logistics” will transform in accordance with the real technology drivers, it relies on time and thus it is indispensable to achieve the state of the art of the technology According to Barretoab et al (2017), the IR 4.0 has great impacts on such Logistics and Operation activities as Resource Planning, Warehouse Management Systems, Transportation Management Systems, Intelligent Transportation Systems and Information Security The Resource Planning: The resource planning management processes, with the implementation of Cyberphysical systems will improve the productivity, flexibility and agility to the fluctuations that might occur in the supply chains The proper involvements and engagements between the main factors like people, materials and equipment which will be likely to create the potentials for customization of resources/processes Warehouse Management Systems: The warehouses, plants and factories are always the important keystones throughout the process of goods flowing from the manufacturing to consuming stages However, in the context of strategic management 4.0, the role of this function needs to be even upgraded as the key pool of competitive advantage for the firms The achievement of IR 4.0 in warehousing activity is the Warehouse Management Systems which will help shift the warehousing procedures into the new level that’s can meet the future demands of operations and logistics in the context of Industrial Revolution 4.0 Transportation Management Systems: A Transportation Management System is among the steps in Supply Chain Management A Transportation Management System can facilitate coordination and collaboration between an order management system and distribution center or a warehouse to bring the products from the first step of ordering and manufacturing to the final step of consumption As management system has developed in to a concrete form, they can assist companies to control and manage ever-higher costs of freight; involve in other operations and logistics technologies including Warehouse Management Systems and Global Trade Management Systems Besides, they can also help companies process electronic interactions with buyers, trade partners, and carriers As their scale of offerings has widened to integrate different capabilities, Transportation Management System has been selected by many companies of variety of sizes and in a wide range of industries Intelligent Transportation Systems: Intelligent Transportation System is an innovative way that can help integrate different procedures of transportation systems together with the examples of transportation management, control, infrastructure, operations and control methods Intelligent Transportation System applies technological achievements comprising computing hardware, positioning system, sensor technologies, telecommunications, data processing, virtual operation and planning techniques The Intelligent 710 Transportation Systems are vital for achieving higher degree of safety and reliability, faster travel speeds, more efficient traffic flow a This system will provide suggestions for collaboration and an appropriate platform for transport activity How can firms (especially smes and startups) employ, accumulate and leverage the appropriate resources and capacities in the context of industry 4.0? Key Factors To Be Successful In The Industry 4.0 Form the analysis of strategies and requirements of each function throughout the value chain of company in the context of IR 4.0, to stay competitive advantage and sustainable competitive advantage in this age, the company needs many assets, but the two most important things are the information and communication technology capacity and the talent resources relevant to running this technology Information Technology Capacity Information technology is present at a great numbers of computer relevant techniques comprising the wireless technologies and audio-visual systems It concentrates on transferring information and data throughout a variety of electronic devices This technology has the great impacts on the operation and existence of organizations For a startup or an SME, Information technology has been considered very essential to stay competitive when this system can help them respond quickly to the constant changes in the market Taking advantage of information technology enables the exploitation of information resources and leads to cost reduction and the maximizing client compliance In the context of this manufacturing age, a great number of gadgets can get access to Internet-based networks has helped information technology become a key factor of manufacturing systems when the agile and highly customized products are accelerated by the systems of digital and virtual production, modeling, simulation, and presentation tools Information technology has seen the popular applications in many areas such as education, tourism, manufacturing, social science implementations, telecommunications, healthcare and so on Skill Capacity of Talent In the context of intensive global competition of today world, the capability of adaptation to changing business requirements will determine sustainability and competitive advantage of companies The advancements driven by the Industry 4.0 in new digital technologies has been extensively changing dynamics of most industries Automation of business processes as well as emergence of innovative business models therefore require new digital skills for workforce Creating future human resources comprise not only attracting and developing new employees, but also developing new skills for current people through training systems as well as reorganizing job processes to help minimize the skill mismatches between work requirements and employees Organizations would require a successful modern human resource 4.0 strategy to deal with the drawbacks of Industry 4.0 transformation New advancements including Internet-of-Things, Big Data, and Artificial Intelligence will automate a great number of the human resource processes, leading to efficient and leaner human resource teams Therefore, organization structure as well as leadership style transformations would be in need for better modern human resource 4.0 practices that would help human resource divisions to play a more strategic role in the overall organization growth The new requirements of outstanding skills will remarkably increase, via the Internet of Things and the level of sophistication and specialization of workforce The workforce competencies will see the dramatic changes with the constant application of the Industry 4.0 paradigm The increasing needs for computational and analytical skills will transform the common profiles of the workforce in industry Because of increasing 711 job requirements knowledge is becoming more and more vital Technical skills are necessary to shift from operational to more strategic orientations Increasing process complexity requires a wider and deeper process comprehension while increasing virtual work requires employees to be able to use smart media, e.g smart glasses Simultaneously, growth of digitized processes will increase a higher need for employees with coding capacities Virtual tasks on servers or platforms demand employees to be aware of cyber security 5.1 General Strategies For Firms From Late-Comer Economies In the context of intensive competition with the foreign firms with the powerful resources (in the domestic and international marketplace), the domestic enterprises from emerging economies must confront with the advantages and disadvantages need clarified to stay competitive in the market The Disadvantages of Firms from Emerging Economies In the competitive environment with the global competitors, the companies from emerging economies must bear such difficulties as the distance from the leading markets (usually in the advanced economies) The leading consumers can help the enterprises better predict the trend of the markets The second drawback is that the firms are very far from the top technological markets because these technological sources are usually located in top firms or the universities or the research institutes in the advanced economies The third disadvantages are the lack of specialized talents to support the developments of the enterprises The Advantages of Firms from Emerging Economies Although they must face many disadvantages as mentioned above, the businesses from emerging economies possess the competitive advantage on their own: The first advantage from the latecomer economies is that they can offer the resources with the lower cost, for instance the pool of the technical talents and the abundant of the inputs The next benefit is that the businesses can get access to the data of the markets due to playing a role as the local firms with the knowledge of the markets These domestic markets are also pool of dynamic and young people who can develop the business activities more innovative and creative that these from developed world What Are the Strategies That Businesses from Emerging Economies Can Adopt to Stay Competitive in The Markets? However, under the achievements of new Internet-based technologies and other technologies, companies from emerging economies can reduce the negative aspects of these disadvantages and can also leverage the positive ones of these opportunities and advantages due to the online interactions and approaching and observing the advanced markets from a far distance However, the deliberate strategies need applied to exploit this chance The Creativity-Improving Strategies: One of the strategies that these firms can adopt is that these businesses can react as the agent of creativity and innovation to have new business ideas and products How and where can they formulate the resources for new business ideas? The answer is that they can observe the business ideas and knowledge from the research institutes, universities or the other companies These companies can integrate the new technologies and ideas into their business operations and then use the fraction of their business profits to invest into their internal R&D activity Adoption of Communication Technology in Business Management Activity: The next strategy is that the companies can apply the Internet and cloud computing into the business activity of their enterprises This can help small firms can minimize the negative impacts due to the limitation of scale and internal resources In reality, the Internet is helping the small businesses achieve the marketing capacities in the global perspective 712 with the very low cost while the finance and accounting management software is helping companies improve the management capacity and reduce the high cost relevant to the business management activity of the firms Besides, the enterprises can create the virtual stores to connect the manufacturers and the final consumers Following the Niche Markets: Some companies will follow the specialized or niche markets in the domestic or internal levels Accordingly, firms will develop their specialized products and then introduce to many geographical markets even the foreign markets They will try their best in the specialized processes or products to be the best players in the selected niche More importantly, via engaging in the global market, the companies can reduce the drawback of small scale having no the advantages of economy of scale and then they are able to leverage their products to all markets Participating into the Business Networks or the Specialized Clusters: To stay competitive in the market, small enterprises can take part in the business networks and cooperate with the larger companies These clusters can accelerate the leakage of technologies and ideas because the small firms can follow the more innovative and bigger firms by observing the technological applications and via the chance of approaching the modern technologies and equipment in the cluster The leakage effect is also, to some extent, positive when there is the movement of employees from the bigger companies to the smaller ones or startups, or via technology consultancy and so on Conclusion And Limitations In summary, the analysis has discovered some findings showing that there have been many changes in the way the functions in the value chain of the company, including marketing, human resource management, supply chain management and finance management The changes needed for the Industry 4.0 have been summarized into two most important key success factors in the IR 4.0 They are the information technology capacity and new relevant skills for talent Other specific strategies to upgrade and leverage resources and capacities have been suggested The paper, however, has limitations due to time pressure and data collection method that need more deeply quantitative and qualitative researches to triangulate outcomes and many drawbacks of IR 4.0 should also be identified and addressed Reference Acquaah, Moses (2003) Corporate Management, Industry Competition and the Sustainability of Firm Abnormal Profitability, Journal of Management & Governance, Vol 7, No 1, 57-85 Alvarez, S & Busenitz, L (2001) The entrepreneurship of resource-based theory Journal of Management, 6, 755–775 Amit, Raphael and Schoemaker, Paul, (1993) Strategic assets and organizational rent Strategic Management Journal, Vol 14, 33-46 Barney, J B (1986a) Strategic factor markets: Expectations, luck, and the theory of business strategy Management Science, 32, 1512–1514 Barney, J B (1986b) Organizational culture: Can it be a source of sustained competitive advantage Academy of Management Review, 11 (July), 656–65 Barney, J B (1991) Firm resources and sustained competitive advantage Journal of Management, 17, 99–120 Barney, J B (2001a) Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view Journal of Management, 6, 643–650 Barney, J B (2001b) Is the resource-based “view”a useful perspective for strategic management research? 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