GSM Lecture 4

Management > Global Strategic Management > Internal environment > Resources and capabilities > Distinctive capabilities

Distinctive capabilities

Distinctive capabilities can be evaluated against a set of criteria (Petts, 1997):

1. Complexity - how elaborate is the bundle of resources and capabilities required?
2. Identifiability - it is easily identifiable?
3. Imitability - is it difficult to imitate?
4. Durability - how long does it endure? Core competences do not last forever. They needs to be updated
5. Substitutability
6. Superiority
7. Adaptability - can it be easily leveraged or adapted?
8. Customer orientation - how is the capability perceived by customers and how closely does it meet their needs?

Problems

How can a firm know how good a core competence is? With regards to a distinctive capability being a product, it is a bit of a chicken and egg situation, as the firm needs to build a product before it is known whether the customer will buy the product.

To solve problems focus groups have been used, but they are relatively ineffective, as the participants could lie.

Overall, problems are only clear in hindsight. At the time it is difficult to determine capabilities and advantages and disadvantages.

Value chain

Value chain illustrated

Value system

System configurations

More configurations

Other considerations

Corporate culture and structure

Performance analysis