Linking intangible resources and competition

Recent strategy literature suggests that intangible resources -- in particular competencies and relationships -- are critical drivers of competitive advantage. However, there seems to be a lack of understanding of when certain types of competencies and relationships are most critical. This paper introduces a framework consisting of three fundamental levels of resource-competition. The framework is illustrated through the pharmaceutical industry. We argue that (1) biotech firms mainly engage in entrepreneurial competition; (2) traditional pharmaceutical firms -- here referred to as big-pharma -- increasingly undertake contractual competition and, finally, (3) generic drug makers compete predominantly operationally. The paper argues that intangible resources contribute differently to competitive advantage depending on level of competition.