Strategy - Environment or Resource based?

Empirical evidence points to the fact that the industry environment does not explain inter-firm profitability differences. Robert Grant's view is that models like Porter's '5 forces' should not therefore be used alone as an analysis tool for strategic planning. Grant prefers his resource based view (RBV) which "offers a superior explanation" (OU 2007) of why some firms are more successful than others. This is a complex area and I am sure Porter and Grant would agree on the need to analyse both the environment and resources as part of a strategy setting process. One powerful point made by Grant is that the forces in the industry environment are themselves often resource based. For example, 'barriers to entry' is an often quoted force controlling market entry. Industry barriers are often the size, power, distribution base, IP, etc. of the industry players and these are the resources of particular firms. The resources are therefore the root causes of other effects that control industries, their attractiveness and the profitability of key players.
Strategies should therefore make the most effective use of a firm's resources. Hamel & Prahalad make a good point in arguing that, further, strategy should stretch a firm's resources in order to ensure that these continue to develop and sustain a competitive advantage.