A key aspect of business strategy is how to build and maintain competitive advantage through strategic use of resources and capabilities. What is the relationship between a company’s strategy and its resources and capabilities? Use examples to explain.
Relationship between a company’s strategy and its resources and capabilities
First let’s understand the role of a strategy in achieving a competitive advantage. This kind of a strategy would involve the identification of the competition, the decisions involving whether to expand and diversify or not, ensure stability and remain focused or strategize to be broad. A great relationship therefore exists between a company’s strategy and its resources and capabilities as the stated characteristics or a strategy in a competitive market would need a clever utilization of resources and existing capabilities. For example a company would need to strategize to engage in unique activities with effective utilization of its resources to outperform its rivals. Companies like Apple and Google always remain ahead of their competitors because they have a clear identification of their capabilities and resources and strategize to utilize them effectively and innovatively.