Intangible Resources Are Important

Tangible and Intangible resources are essential for the company as it provides the business with the ability that includes give attention to future and gives meaning to a business (Deprez and Haak 2000). Tangible resources include equipment's, complexes, etc, whereas intangible resources include skills and knowledge about the merchandise. Tangible assets can be purchased and altered from the marketplace however intangible resources cannot be purchased as they are purchased from training and days and nights of hard work. The effective management uses resources as a strong sign for the financial success of the business. A business that uses both of its resources such as tangible and intangible resources produces more profit compared to companies that lacks resources. All corporation have both types of tangible and intangible properties that are built-into on system or process for the achievement of one common goal. Both tangible and intangible resources are important for the business's progress and overall value of the business as they are the primary backbone if the business (Hamel and Prahlad 2008). Yet, in my thoughts and opinions intangible resources own an upper hand compared to tangible resources which is described later in the project.

Tangible resources are possessions that can be discovered and quantified, such as development equipment, manufacturing plants and formal reporting constructions (Hoskisson 2008). As tangible resources, a firm's borrowing capacity and the position of its physical facilities are obvious (Hitt et al. 2008). Tangible resources make reference to the physical investments that an group possesses and can be classified as money, physical resources and organizational resources (Henry 2008).

Financial resources: Includes company's cash amounts, gearing (debt-to-equity ratio) and debtors and collectors (Henry 2008).

Physical resources includes such things as the current condition of buildings, machinery, materials and effective capacity (Henry 2008).

Organizational resources: The firm's formal reporting framework and its formal planning, controlling, and coordinating systems (Hoskisson 2008).

Examples of Tangible Resources:

Apple has liquidity worthwhile $98 billion and market capitalization of over $622 billion (highest market capitalization ever before touched by publicly traded company.

Apple Inc. corporate and business headquarters are positioned in Cupertino, California. The campus has total part of 850, 000 square feet and six properties. Apple also offers more than 364 shops in thirteen countries.

Apple has 60, 400 everlasting full-time employees and 2, 900 temporary full-time employees worldwide.

Intangible Resources

Intangible resources comprise intellectual, technical resources and reputation. Technical resources include an organization's capability to innovate and the quickness with which innovation occurs. Intellectual resources include patents and copyrights which themselves may derive from the organization's technical resources (Henry 2008). Intangible resources are resources that are rooted deeply in the firm's history and have accumulated over time. Because they're inlayed in unique habits of exercises, intangible resources are relatively difficult for competitors to analyze and imitate (Hitt et al. 2008).

The reputation or goodwill of an organization is increasingly recognized as a very important intangible asset which can simply be destroyed by ill-thought-out strategies and marketing campaigns. Knowledge, trust between professionals and employees, managerial capacities, organizational routines, technological capabilities, the capacity for innovation, brand name and the firm's reputation because of its goods or services and exactly how it interacts with employees, customers and suppliers are intangible resources (Hitt et al. 2008).

Examples of Intangible resources:

Patents- Apple gets the maximum quantity of patents accompanied by Microsoft, Google and yahoo.

Copyrights- It is registered with the United States copyright office as a service provider under the copyrights act of 17 USC 512

Trademarks- Mac pc and Macintosh personal computer OS. Only apple and the certified reseller and licensees may use the apple's logo in advertising, promotional and sales materials.

Goodwill- It really is basically the difference between price payed for a corporation during an acquisition and net belongings of the obtained company. Apple bears $5. 5 billion of goodwill on its balance sheet.

Organizations with valuable tacit knowledge built up through their cultures, procedures and employees have got an intangible source of information which cannot commonly be moved.

Human Reference: Procedures and plans such as settlement system, face to face training programs and worker incentive enhances labor productivity and reduces employee turnover thus creating intangible possessions.

Customer Relationship: Customer related intangibles can be found when the commitment of customers to a product or a company allows company to secure a big market share in comparison to its rivals.

Fast Paced Technology Markets

In today's world organizational environment differs from that of former. Competition in the market segments, advancement of technologies, quality of service and variety are forcing all the companies to think about their strategies again. In today's time the fast paced technology marketplaces are driven by development and demand for change available environment (luthans, 1995). For example OEM appliance and software developers are looking for ways to outsource the creation to contract manufacture associates because the market leaders in this field have trained and professional employees.

Following are few ways where a company can stabilize itself in the fast paced technology market:

Keeping up with Industry changes- The company that stays up to date with new technology and advancement, new application and changing market are and you will be much better than those companies taking their work softly and you will be able to complete the spaces in their products and services in an effective manner (Carey and Gross 2012).

Admitting mistakes- On this fast paced technology markets, companies are aggressive and need to prosecute new strategies and initiatives. The main element to the is by admitting once fault and not duplicating it, however it can be carried out by having an in depth planning and diligent research of products and strategies (Carey and Gross 2012).

Reward and struggle Employees- For any company to achieve maximum growth in the market among its opponents many things should be kept in mind such as strategies, resources but most of all they should keep in brain their employee's hard work because they are the most valuable asset to the company. The business should make up them via salary, campaign, benefits, etc to ensure high amount of employee retention rather than changing software after each 3 months before the launch of a fresh product (Gross 2012).

Exploring financing options- A company should be sponsored by express, federal or local agencies so as to secure their risk capital and they can get all the cash from them only with a good reference to them and by giving them some benefits (Carey 2012).

Role of Tangible and Intangible Resources

Both the tangible and intangible resources play an important part in the company's expansion as tangible possessions can be liquidated and converted into cash so for the high risking companies such as Apple it will be easy to use risk keeping the tangible resources secured whereas for Intangible assets it offers company an individuality and also helps in the expansion of the business. Both these resources add value to the business as it reduces the risk of the business. For instance maintaining of product equipment (tangible advantage) really helps to save lots of time and reduces man vitality problems and safety of brand or trade secrets of the company (intangible resources) helps to protect the business from opponents.

Tangible sources of a firm are classified directly into four categories namely:

Financial Resources: Increases the businesses borrowing capacity and also helps the company to generate cash.

Organizational Resources: Assists with handling and coordinating of the company's structure and also to formulate an idea.

Physical Resources: Helps the business to keep up its recycleables.

Technological Resources: Keeps the stock of all the solutions such as equipment, equipment, etc.

Intangible assets are actually unique due to following reasons:

Partial excludability- Who owns the company enjoy the full benefit for its intangible possessions however its limited to a restricted time as patents expire after twenty years or the competition try to acquire it. Same is designed for a brand because there is a difficult competition out in the market and also due to rapid change in the consumer's preference. For e. g. Brands like Polaroid, Xerox, etc are going bankrupt.

Nonmarketability- The intangible resources like copyrights, trademarks, patents, etc aren't transparent and therefore not exchanged in markets as a result of difference in knowledge between buyer and retailer (Lev 2005).

Allocation of Resources: It is a process of learning the best way to utilize the resources in a company for the conclusion of the project. Companies usually allocate resources to minimize cost and on a single hand to increase profits by building guidelines and implementing policies and strategies that helps the business enterprise to realize its goals (Mangold 2009). It involves using of materials, equipment's and labor to achieve the goal. It mainly targets tangible and intangible resources to achieve success on the task.

The allocation of resources often helps the business to concentrate on future. For e. g. a business puts together an idea that allows syndication of resources in the event if one or more products of a company experience a reduction in sales (Keller 2000). A firm that has multiple chains often design a contingency plan to reallocate resources in case there is any type of disaster because it prepares the business to keep providing goods and services to customers with minimal disruption which results in bare minimum losses and will keep profits high whenever you can.

Being said the above both tangibles and intangibles are an important tool to the business as both of them benefit the business in a single way or the other. Both of these provide a company with the competencies.

Competencies of Company's making it through in fast tempo technology marketplaces: It is vital for a business like Apple, Samsung, Nokia, etc to possess competency in it in order they have the basic product knowledge to be able to compete effectively using their competitors.

To make it through in this overly busy technology market the business are supposed to think out of the pack and create products that customers could never imagine and later are fascinated towards it when it's launched (Prahlad 2009).

Following are few ways by which a company may survive in fast experienced technology markets-:

Focus- Main way to compete in such market segments is never to leave your concentration and to provide around weak areas so that the competitors does not take good thing about the weak section.

Differentiation- Providing original products and services rather than imitating things such as brand image, distribution networks, etc helps to increase the momentum of the company.

Successful companies often takes into account different sets of opportunities and constraints and are also liberalized by making their company structure more professionals exposed and adaptable. The firms should understand the worthiness of their investments and should also assess and change their strategies with time. Successful companies like Apple, IBM, Dell, etc have previously captured their show in the market making it difficult for new companies to emerge.

Example: Siri an robotic intelligent technology by Apple could do a lot and tell about almost anything including weather, local shopping malls, etc to iPhone owners and also fascinated lots of other people to buy iPhone.

Along with apple others which have achieved competencies are Dell, Toyota a Japanese car company, Benetton clothing, etc as all these companies have configured their value chains to compete more effectively with their competitors in the market.

Both tangibles and intangibles resources become a glue to bind the business together of your company to make it through and challenge others in the overly busy technology market (Hamel 2009).


Intangible assets are important as it offers competitive advantages, communication skills and decision making process. Intangible belongings of company helps in providing managers capacity to deliver its strategy carefully, customer romantic relationship, etc.

The key value drivers for any company establishes and uses inputs in to the modeling process, it includes the following

Trading history that includes margin and sales fads,

Role within the worthiness chain,

Existing market footprint.


Intangible assets are the main elements of a business because they increase the earning power of the venture combined with the tangible assets (Smith and Parr 1994).

In my view the intangible sources of Apple such as patents, copyrights, etc, are way more important than the tangible areas of Apple such as liquidity, capitalization, etc.

Intangible possessions help the organization to be more sustainable and not easily copied by the competitors.

E. g. Apple sued Samsung for copyrights and Samsung were required to pay $1 billion in return.

A key matter for companies in realizing their intangible investments is their impact on financial statements (Hughes 2006). You need to look over few steps and key factors of intangible property/ resources to learn the importance on intangible assets and their value as shown below:

Identification of Intangible Property- Requires a thorough knowledge of business and recognition of the standards to ensure the correct identification of all intangible resources and avoiding a variety of risk.

Valuation Strategy- Selecting the correct valuation approach requires an understanding of the business enterprise, information available and value motorists of the specific asset.

Valuation Analysis- Though we know that inappropriate assumptions can result in an over/under affirmation in the reasonable value of intangibles therefore a correct valuation of resources is required before the startup of the business enterprise.

Reconciliation of Results- Come back on intangible resources should be considered relative to the chance of the other investments in the business (Stanley 2012).

Value of Intangibles: The value of Intangibles are actually is very important and challenging. For e. g. : Microsoft value its brand and regularly makes whole lot of profits and also have a high market show of jointly determined by impressive technology with trained employees and effective sales and advertising work (GU and lev 2002).

Intangible possessions as security- Due to high inability in the company, small percentage of intangible resources are also given as guarantee for loans depending on the lender's willingness (Ruler and Henry, 2002).

Market Way reflects the purchase price on the investments purchased in business deal under similar circumstances, whereas income way is dependant on the near future value an asset will create over its left over useful life and cost strategy estimates the worthiness of the property by reference to the cost that might be incurred to displace the asset if and when needed (IFRS 2009).

Furthermore in giving intangible resources an higher hand on tangible resources is by analyzing it on regular basis and checking it overtime. Because of the intangible resources, Apple has been the NO. 1 brand all over the world, patents has more enduring results. Also patent citations can be used as proxy for quality and market values premium for businesses with the highest citation per patents.

Also the success of a firm lays more in the system capabilities (intangible resources) than in the physical property (tangible resources). In the past few years anticipated to rapid change in the technology, intangible resources have become more important and the ratio has increased from 37% to 63% whereas for tangible resources it has lowered from 67% to 34% (Kendrick 2010).

Marketing also plays a very important role because marketing intangibles such as customer point of view, brand and equity, customer relationships, etc. because they are challenging to duplicate because they are directly related to the company and its own environment so it contributes to market value and competitive advantages (Reinartz and Kumar 2000). Without a doubt marketing is a significant source of company's relationship with its stakeholders. This is because only through marketing company gets closer to its markets, customer and everything stakeholders (Stead et al 2004).

All this happened because intangible possessions/resources aren't obvious and are difficult to imitate or purchase by the rivals as the greater invisible a tool is a lot more sustainable the company is likely to be.


In the above mentioned paragraph it is clearly mentioned that a company will need a couple of tangibles and intangibles resources because of its merger in the market and to develop big it is meant to possess knowledge, skills, trained employees, etc because of its survival. It isn't easy for a new company to make it through in today's overly busy technology markets but this can be overcome if the company is aware its strengths, weaknesses, opportunities and dangers. Though with all of this tangible and intangible resources plays an important role because of its growth and survival because both of these resources provides value to the company as tangible resources can be converted into cash and in intangible resources gives identity to the company, provides competitive edge, communication skills and decision making process. Intangible resources of company helps in providing managers capacity to provide its strategy thoroughly, customer marriage, etc, without which the company is little or nothing. Also methods such as focus on the business mainly on its weakness, differentiation of products to be able to avoid conflicts from the competitor companies, marketing and liberalization makes the business structure more strong and adaptable allowing professionals to be open of what's happening round the world and their views are also considered.

However in my view intangible resources are bit more important for the business because intangible assets/resources are not noticeable and are difficult to imitate or purchase by the opponents as the greater invisible a reference is a lot more sustainable the company may very well be.

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