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Strategy and Organisation Chapter 3 Summary: Strategic Capabilities
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A detailed summary of chapter 3 of the book: Strategy and Organisation of Utrecht University
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Chapter 3: Strategic CapabilitiesOrganisations are not identical, but have different capabilities. It can be
difficult for one organisation to obtain or copy the capabilities of another.
The implication for managers is that they need to understand how their
organisations are different from their rivals in ways that may be the basis
of achieving competitive advantage and superior performance.
Foundations of strategic capability
Strategic capabilities are the capabilities of an organisation that
contributes to its long-term survival or competitive advantage. There are
two components of strategic capability: resources and competences.
Resources are the assets that organisations have or can call upon and
competences are the ways those assets are used or deployed effectively.
If strategic capabilities are to provide a basis for long-term success they
cannot be static. Dynamic capabilities are an organisation's ability to
renew and recreate its strategic capabilities to meet the needs of
changing environments.
::::Three generic types of dynamic capabilities:
Sensing. This implies that organizations must constantly scan, search
and explore opportunities across various markets and technologies.
Seizing. Once an opportunity is sensed it must be seized and
addressed through new products or services, processes, activities, etc.
Reconfiguring. To seize an opportunity may require renewal and
reconfiguration of organisational capabilities and investment in
technologies, manufacturing, markets, etc.
Strategic capabilities include both operational capabilities and dynamic
capabilities that can change operational capabilities in case the
environment changes. However, as dynamic capabilities are focused on
finding solutions beyond and outside current operational capabilities there
is a trade-off and tension between the two that can make it difficult to
achieve an optimal balance between them with a single organisation or
unit.
Threshold capabilities are those needed for an organisation to meet the
necessary requirements to compete in a given market and achieve parity
with competitors in that market. Without such capabilities the organisation
could not survive over time.
Threshold capabilities are important, but they do not by themselves create
competitive advantage or the basis of superior performance. Distinctive
capabilities are required to achieve competitive advantage. These are
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