The paper "Factors that Influence the Firm Capabilities in Competitive Advantage " is a perfect example of management coursework. The four factors that influence the firm capabilities in competitive advantage include the use of imperfectly imitable, rare, valuable and non-substitutable resources. First, is the use of imperfectly imitable resources such as intellectual property. A well-developed intellectual property includes patents, trademarks and logos. This provides a monopoly, as a developed trademark, can legally prevent competitors from taking advantage of customer goodwill generated by the business. Also, trademarks and patents increase the monopoly of the firm in the market.
As a result, the business should have an IP strategy as part of corporate planning strategy (Andersen J 2010). Another criterion is the use of non-substitutable resources such as the use of people as the main source of competitive advantage. Firms' technologies, goods, structures can be easily copied by competitors those with vast financial resources. However, it proves very complex for other firms to match and copy the highly enthused and caring customers a firm has. Also, the use of rare resources where the resources are not controlled by the competing firms, trust is a dynamic that can be employed by managers to gauge the competitiveness of a firm.
It should be observed by both individuals and organizations. Lastly, managers can use valuable resources to improve proficiencies and efficiency. However, managers should be flexible with technology as resources are presumed to be valuable can be obsolete. For example, by use of the above-mentioned dynamics Coca-Cola has maintained top position since start overcoming competitors like Nestle SA (Hinter hubA, 2013). Body Analysis Core competencies are as a result of a specific set of skills that provide supplementary value to the customer (Carmwell A, 2004).
Also, they allow a firm to access various markets, as well as, the development of central products. Again, core competencies allow the business to give attention and efforts on things they do well and utilizing as much as they can for everything else. Utilizing core competencies can boost business by performing a unique thing that the competitors cannot do. However, core competences should be relevant to the fact that there are activities that influence the consumer on the products produced by a company.
At the same time, they should be of difficult to imitate. This will result in the company offering goods that are better than those of the competitors'. Subsequently, it will be difficult for the competitor to catch up on every day the company is working on the competence to improve and sustain the competitive position. Lastly, it should be able to open up potential markets. If the competence only opens up small niche marketplaces, the success in the markets will not be sufficient to sustain noteworthy growth and competition (Carmwell A, 2004).
Basically, resources are the materials, dynamism, staff, and knowledge and assert. They have three main characteristics includes utility, limited availability as well as potential exhaustion. Additionally, they can be used as a key competence by utilizing them for innovation and technology. Examples such as non-substitutable and valuable resources can be used to foster innovation in a firm. Non-substitutable can be utilized where wise managers can buy the engineers as well as the suitable programs developed by the engineers in the world best universities.
At the same time, the managers can utilize valuable resources by maintaining IT experts in their company, as well as, funding their projects. This will work as a key competence to the company because of its leads to the market expansion where goods can be sold globally. Also, technology allows companies to keep the cost at a minimum where it reduces human dependence to perform necessary production process (Carmwell A, 2004). On the other hand, capabilities refer to the connection between capacity and ability. Also, it can be explained as the knack to achieve definite actions through the set of manageable and measurable faculties and features.
It can be used as a core competence by utilizing company capabilities of mass production. Here the companies capabilities are the strengths of the companies. They can be used for market expansion thereby an advantage to the company and competence to sustain competition (Carmwell A, 2004).