The Relationship between Core Resources and Strategies of Firms: The Case of Sri Lankan Value-Added Tea Producers

Abstract

Even though the strategy and resource-based views separately argue that superior performance is influenced by strategies and resources of firms, this study argues that there can be an indirect relationship between the core resources and strategies of firms. The strength of this relationship was examined based on a set of data gathered from a group of value-added tea producers in Sri Lanka. The cannonical analysis revealed a significant relationship between strategy and resource patterns; however, resource patterns explained only 21 per cent of the variance of the strategy patterns. This indicated that the Sri Lankan value-added tea producing firms' choice of, and ability to perform a particular strategy are weakly associated with their core resource strength.