20twenty had advantage creating resources in all three groups, as explained by Collis and Montgomery (1995):
Physical capital resources
Human capital resources
Organisational capital resources
Only resources that could be sources of a sustained competitive advantage will be looked at in great lengths in this writing. The value, non-substitutability, rareness, and inimitability of these resources will be analysed to see if they meet Collis and Montgomery (1995)’s five tests of advantage creating, viz: inimitability, durability, appropriability, substitutability and competitive superiority. The analysis will be done keeping in mind the assumptions as listed in appendix A below.

Resources and Profitability
The following resources are identified for discussion:
First mover advantage
Customer loyalty
The resources mentioned above are capable of allowing 20twenty implement strategies for effectiveness and efficiency. Because they add value to 20twenty, they can be considered as sources of competitive advantage that is sustainable (Barney, 1991). The idea of transparent flat monthly charges drew more clients to 20twenty.

20twenty as the first virtual bank in South Africa had a lot of opportunities to create resource position barrier. Because it had no physical presence, it had an opportunity to save more on financial resources than major banks. These savings translate to more potential fast growth, which would enable it to create entry barrier. It may then use the barrier to cement the lead (Wernerfelt, 1984).

It is close to impossible for major banks to close all their operations to imitate a newly formed virtual bank. Entry barrier in at least one market is good, but an entry barrier without a resource position barrier leaves 20twenty vulnerable to diversifying entrants (Wernerfelt, 1984). The only entry point for other banks is through internet banking.

Threads might also come from non-existing entrants (new comers) to compete in the virtual space. However, if 20twenty succeed in exploiting the barrier – maybe using economies of scale, these new comers might not find it easy to stay in business and will collapse as a result. For example, if 20twenty craftily execute the experience curve strategy, late acquirers should pay more and expect less return on the same experience (Wernerfelt, 1984).

According to Barney (1991), organisational culture may be one resource that is difficult to imitate. 20twenty’s culture is one of a kind, and has earned them a good place in the hearts of their client, thus strong loyalty.

Contrary to popular believe that Resource Based View (RBV) critiques Porter’s five forces (Groen, Kraaijenbrink and Spender, 2009), porter’s model can be used to complement the RBV. Though it might be difficult to imitate 20twenty’s resources, substituting them with other resources of the same quality is possible (Porter, 1985). It therefore follow that most human capital resources like team experience, managerial experience, etc. cannot necessarily be seen as sustainable competitive advantage – in this light, though they might be rare, inimitable and valuable.

On the other hand, employees that leaves 20twenty present a threat as it experiences experience leaks that might land in the competitor’s yard. This will destabilise 20twenty’s barrier, by enabling the competitors to lower their costs.
20twenty’s resources should be able to stand the test of time. The longer the resource last, the more valuable it is. As a virtual bank, 20twenty should rely more on technology, thus investment in R&D becomes a necessity. To protect its position, 20twenty should grow its technological capacity. Things like web traffic quota limits should have been avoided.

Technological lead should not be seen as a sustainable competitive advantage, because anyone can come with something better at any time. Technology grows very fast and can be easily replaced with better new ideas. According to Collis and Montgomery (1995), relying on the durability of resources like technology is risky as most core competences have a limited life and will only earn temporary profits.

Collis, J. and Montgomery, A. (1995) Competing on resources: Strategy in the 1990s. Harvard Business Review. 73, pp. 118-128.

Barney, J. (1991) Firm resources and sustained competitive advantage. Journal of management. 17, pp. 99-120.

Wernerfelt, B. (1984) A Resource-Based View of the Firm. Strategic Management Journal. 5 (2), pp. 171-180.

Groen, A., Kraaijenbrink, J., and Spender, J.C. (2009) The resource-based view: A review and assessment of its critiques Online. Available from: Accessed 2018-08-22. MPRA. 21442.

Porter, M. E. (1985) Competitive Advantage. New York: The Free Press.

Appendix A
20twenty had no research and development (R&D) department.

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