Question

explain how a firm can use capabilities and resources to create value. Give two examples of each

please write a detailed answer

thanking you

Answer 1

The externally obtained resources are organization-addressable. In addition resources can be categorized as specific or non-specific. Those resources which can only be used for extremely specialized intentions and are significant to the organization in adding value to goods and services are called specific resources. Non-specific resources are less specific and are less significant in adding value.

Resource is an output to the production process. It may be tangible as in the assets of the company that can be seen or qualified. Human resources , funds and physical plant and equipment are examples of these tangible assets. Resources may also be intangible such as reputation or a stock of patents and copyrights.

Capabilities refer to a company ability to make use of resources in a high protective manner. Both resources and capabilities are source of competitive advantage and can be imitated. Highly competitive organization spends a considerable amount of resources to develop their capabilities. A highly competitive organization builds those organization capabilities, knowing that it is virtually impossible to replicate the totality. They employ highly driven individuals and in the corporate environment they create, allow these individuals to unleash the creativity. Experience with executive search industry has shown that competitors believe that if they are able to attract star performers, who appear to give organization a competitive edge, then their organization immediately gain advantage