Capabilities – are skills, which bring together resource and put them to purposeful use. The organizations structure and control system gives rise to capabilities which are intangible. A company should have both unique valuable resources and capabilities to exploit resources and a unique capability to manage common resources.
Capabilities refer to the firm’s ability to utilize its resources effectively. An example of a capability is the ability to bring a product to market faster than competitors. Such capabilities are embedded in the routines of the organization and are not easily documented as procedures and thus are difficult for competitors to replicate.
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