Strategic Capabilities = Resource + Competence
Here we will see that what is the company capable of.
Any company can be capable in anything because of two things:
1) Resources 2) Competences
Example:
Assume that Hi tech machinery is our resources but that resource is of no use if we don’t know how to run and design and produce effectively.
So that’s why we need both resources and competences.
There are two kinds of capabilities:
1) Threshold Capabilities = Minimum capabilities needed for the organisation to be able to compete/survive.
2) Strategic Capabilities = Threshold capability plus the capabilities which can give you competitive advantage.
To perform very well in any industry or competition you need competitive advantage which consist of two elements as below,
1. Unique resources = Patent / Knowhow / Diamond mine.
2. Core Competences = Apple (innovation), Asian paints.
Ways in which organisation uses its resources better than its competitors and in ways that other cannot imitate.
You can’t buy core competence in market so relying on core competence is more beneficial in long run if you have unique core competence.