How might a firm’s resources limit its search for opportunities?
There are many ways in which a firm’s resources can limit its search for opportunities. In some cases, the firm will be unable to find out about opportunities. In other cases, it will know of the opportunities but will be unable to exploit them because of a lack of resources.
On the one hand, a firm that lacks resources may not be able to find out about opportunities. For example, imagine a small private school in a rural that wants better teachers. There might be many good teachers in cities hundreds of miles away, but the school might not have the resources to identify and recruit them. It therefore lacks the ability to find out about opportunities to hire good teachers. As another example, a natural gas firm without many resources would have a very hard time conducting the sorts of surveys that would be needed to find new deposits of gas that could be exploited.
On the other hand, firms that lack resources may not be able to exploit opportunities even if they know about those opportunities. For example, American colleges today know that there is a lot of opportunity to be had in China. Some colleges have opened campuses in China, but there are many colleges that do not have the resources to do this. Thus, these colleges miss out on opportunities even though they are aware that the opportunities exist.
One way that a firm’s resources might limit its search for opportunities is if it has limited resources, and does not have the resources to search for opportunities. For example, if a firm wants to develop a new manufacturing technique, it will need to expend resources in research and development, but it may not have the funds.
Another way a firm’s resources could limit its search for opportunities is if it has the resources it thinks it needs, so it does not search for opportunities. Sometimes not looking for opportunities because you think you have the resources you need means missing some opporunites.