JOURNAL OF BUSINESS LOGISTICS. Vol 21. No. 2. 200C Resource-Based Theory In Porter's generIc strategy approach, tirms respond to competitive market forces that are extemal to the organization. In contrast. the resource-based theory involves capabilities or resources nternal to the organization These aie developed over long pe riods and provide a competitive advantage that leads to superior firm performance The exter nal (market forces versus internal (resource-based)orentation n strategy development Is paramount In distinguishing between these In 1984, Wernerfelt published the seminal article on resource-based theory. He proposed that firms are bundles of resources that can be employed to influence performance Miller and ShamsIe sought to ascertain whether there is any empirical support for the concept by examining historical data from the motion picture industry h The results indicated that certain firm resources lead to supenor performance Specifically, they identified two br oad categones of firm resources in the motion pIcture industry knowledge-based (i e, production and talent capabilities and property-based (Ie long-term contracts)tesources Distinctive Capabilities. How Is resource-based theory manif sted within the firm?As Day notes, a firm's distinctive capabilities are one source by which to lever- age greater firm performance and Increase competitive advantage Distinctive capabilities are not simply the resource of the firm but resources so deeply embedded in organizational routines and prat tices that they cannot be traded Day states that distinctive capabilities are"complex bundles of shills and accumulated knowl- edge, exercised through organicational processes, that enable 'irms to make use of their assets and. functions like a key success factor" Distinctive capability s enable the firm"to deliver value to customers In an appreciably more cost etfective way land arel the glue thut brings. assets gether and enables them to be deployed advantageously."According to Drogeet al. capabilitY (competencies)form the key sources of competitive advantage In the furniture industry Prahalad and Hamel propose that firms possess core competencies(cap. bIlitles)that enable them to out perform competitors through the use of"intangible resources". )thers suggest that firm resources and competencies may account tor competive advantage and thut sustainable competitive advan- tage Is moderated by an organizations resources and skills There is a great deal of theory about firm resources and their use through distinctive capabil ties, but there is little empincal evidence about the details of these capabilities or the relationshi If any. among distinctive capabilitIes, strategy and overall tirm perfor mance Logistics Capabilities. LogistIcs Is an area that provides a foundation upon which to build Some measurement of logistics capabilities has taken place, and Inka es have been established between logistics capabilities and firm performance We extend this work by lesting the proposed relation- up, among capabilities, strategy, and firm perfor mance within a logisties context ht⊙2001. All rights res