Can Big Data Protect A Firm From Competition?

By Anja Lambrecht & Catherine E. Tucker –

This article looks at big data through the lens of a classic framework called the “resource-based view of the firm.” This framework states that, for big data to provide competitive advantage, it has to be inimitable, rare, valuable and non-substitutable. On deeper analysis, big data is not inimitable or rare, it is unlikely to be valuable and it is not always non-substitutable. In order to extract the value from big data, firms need to have the right managerial toolkit. The history of the digital economy offers examples where a simple insight into customer needs allowed entry into markets where incumbents had access to big data. Firms need to focus on developing both the tools and organizational competence to allow them to use big data to provide value to consumers in previously impossible ways.