The resources of any firm are described as the assets, knowledge and skills they have. Therefore, these can refer to the physical materials they have, to the talent that works for the brand. 

The capabilities refer to the ability of the companies to make use and take advantage of the resources they have. Like the resources, they are a big part of getting a competitive advantage. It’s imperative to recognize and cultivate them. Firms can have multiple competencies, and, in order to identify them they should take into account those competencies: provide superior value to consumers, they are difficult to replicate, and they should be rare. 

This is described as the monetary, material or assessed worth of an asset, good, or service. Value can go beyond the financial explanation, diving into the area of providing and proving to be of benefit to the company’s stakeholders. 

It refers to the factors that allow brands to have advantages over their competitors, for example, being able to offer their products at a cheaper price. These allow the firms more opportunities to become more appealing to the consumers. Some factors that are considered to provide competitive advantage are: branding, intellectual property and customer services. The two main types of competitive advantage are: differential and comparative. 

All of these concepts are connected. It could be said that by making use of the resources through the competencies can create value and lead to competitive advantage. 

1.     Recursos:

Abarcan a los fenómenos individuales, sociales y organizacionales. Las compañías deben de cambiar sus recursos para forjar sus capacidades. 

Ellos utilizan la competencia central de su tecnología para ofrecer sus servicios para cualquier persona que tenga conexión a internet y una tarjeta para comprar. 

a.     Recursos Tangibles - Activos que podemos ver y cuantificar. (maquinaria de producción, instalaciones, centros de distribución, etc.)

b.    Recursos Intangibles - Activos que tienen raíces profundas en la historia de la compañía y se han ido acumulando. (conocimiento, confianza, empleados, capacidades administrativas, rutinas organizacionales, nombre de la marca, innovaciones, etc.) à Entre menos es visible un recurso (entre más intangible), más valor tiene para crear capacidades, ya que para las competencias es mucho más complicado replicarlo.  

2.     Capacidades:

Las compañías combinan ambos recursos para crear capacidades. 

Desarrollo, transmisión y el intercambio de información y conocimiento entre el capital humano y la compañía. 

3.     Competencias Centrales:

Capacidades que funcionan como origen de la ventaja competitiva de una compañía frente a sus rivales, reflejando su personalidad. 

 Construcción de competencias centrales:

Existir cuando los competidores no pueden replicar los beneficios de la estrategia de una compañía y cuando carecen de los recursos necesarios para tratar de imitarla. 

1.     Capacidades Valiosas - Explorar las oportunidades o neutralizar las amenazas presentes en el entorno externo, creando valor a los clientes. 

Cada vez son más vulnerables a las mismas presiones del mercado de capitales por los medios digitales por la facilidad de imitar una idea o producto. 

2.     Capacidades singulares - pocos competidores. (Ej: Walmart - fomentar valiosas iniciativas verdes/sostenibles).

3.     Capacidades costosas de imitar -  Otras compañías no pueden desarrollar fácilmente. La compañía tiene una cultura organizacional única y valiosa en las primeras etapas de su historia, esto podría hacerlo más difícil de copiar perfectamente bien. También cuando hay causas ambiguas es difícil de copiar, ya que los competidores no comprenden cuáles son las capacidades de la compañía son las competencias centrales que utiliza como cimiento de su ventaja competitiva. La última es la complejidad social, como las relaciones interpersonales, confianza, y la amistad entre los trabajadores, proveedores y clientes.  

4.     Capacidades insustituibles - No tienen equivalente en términos estratégicos. El valor estratégico de las capacidades se incrementa de medida que se va dificultando la posibilidad de sustituirlas. (entre más intangible, mejor)

Permite a la compañía saber cuáles partes de sus operaciones crean valor y cuáles no. 

a.     Actividades de cadena de valor -  la compañía las desempeña a efecto de desarrollar productos para, vender, distribuir y brindar servicios para esos productos de modo que creen valor a los clientes. 

b.    Funciones de apoyo - incluyen actividades o las tareas que desempeña la compañía a efecto de apoyar el trabajo que se desarrolla para crear, vender, distribuir y brindar servicios para sus productos. 

An organization offers valueto customers through their operations, as the competition grows between companiesgrows among companies, they are forced to fundamentally reconsider where and how they add value. What they usually do is to make some changes in the value proposition. Also,according to many of the executives interviewed in the KPMG report, “this will require companies constantly to review and adapt their business model around the needs of the customer. What makes this more complex is that customer requirements differ from country to country, so often an established business model will need to be adapted as companies enter new markets”. (KPMG International, 2005)

 

They are the inputs of the production process of a companyand are divided into two types

1.    Tangible resources - they are assets that we can see and quantify; for example, production machinery, manufacturing facilities, and distribution centers.

2.    Intangible Resources - These types of assets have deep roots in the history of the company and have been accumulated over time. Resources are intertwined with routines that have unique patterns, which is why they are difficult to analyze or imitate.

 

 

When you make a good use of your skills, having advantage over the other companies, creating value and establishing a road to success.
On the other hand, core competencies are the capabilities that a company has to generate competitive advantage over its rivals and are obtained over time through an organizational process that accumulates different resources and capabilities, adding a unique value to the goods or services that are sold to customers. What they represent is the competitive spirit and personality of the company.

According to my “Value Chain” professor, Michael Portar says that competitive advantage is when a company has the ability to overcome another within the same industry or sector. Also, If a country creates conditions for many companies to be competitive within it, it creates an environment that creates better conditions for international trade. (Pliego, F. 2020)

 

            “… the majority of global executives now see their business model as a more important source of competitive advantage than their products…” (KPMG International, 2005) According to the text of Rethinking the business modelwhat companies should do in their business models is to evolve and adapt to reflect changes in the business environment. The best example of having competitive advantage is the Netflix business model evolution because they noticed their strengths and weaknesses to evolve towards offering the best service and creating a unique value.

Capabilities Power or advantage to do something with capabilities that stand out from the company.

Value It is measured in terms of the characteristics of the product's performance and those attributes for which customers are willing to pay an amount.

Competitive Advantage A condition or circumstance that puts a company in a favorable or superior business position.

What are the sources of a company's advantage?
1. Uniqueness (Hard to replicate)

2. Added Value 

3. Sustainable over time 

4. It is not about what, but about why.

• Innovation is essential for competitive advantage
• People are an important resource for people to learn to innovate (Peer to Peer)
• All competitive advantages have a limited duration

o   Show unique qualities: what do you that others don´t?

o   Highlight advantages: what do you do better than your competitor?

o   Display parity: differences between you and your competitor
o   Don´t run from disadvantages

Resources are not competitive advantages, in fact resources create value when the company uses them to produce capabilities. 

Capabilities are the combination of tangible and intangible resources. Companies use them to perform organizational tasks to produce, distribute and provide services to create value

-        First mover’s advantage is important, as more experienced enterprises can have a hard-to-steal competitive advantage.

-        Competitive advantage creates value, that is the amount of money customers are willing to pay for a certain characteristic on a product.

-        An enterprise must always listen to the market and their customers’ needs, just as Netflix did. It changed its business model according to what the market dictated and eventually were successful. It is important to know that they had a first mover’s advantage in the industry.

-        When others start to imitate your competitive advantage then it’s time to innovate and change it. It also happened to Netflix that others started to imitate their business model and advantages.

-        Global strategies are always better, companies with a business model designed to fit local markets tend to struggle when expanding.

-        Technology is the enterprise’s friend, companies that do not adapt to technological changes are bound to fail. Most of successful enterprises depend on technology or are technology enterprises themselves.

-        To be competitive, a company needs to make analyses of their supply chain, product, competitive advantage, and industry to know what creates value and what does not create value. And modify those aspects that do not create it. 

The influence of the economic environment (external environment) affects the success of the company, but also the way in which the company uses its resources and capabilities as a foundation for the core competencies demonstrate how valuable it is to know the internal organization of a company. 

Innovation is paramount if a company wants to maintain its competitive advantage since the competitive advantage is limited in time. 

The possibility of sustaining a competitive advantage depends on 3 factors:

It is because of these factors that companies are challenged to effectively manage their current core competencies and develop new ones at the same time. 

Identifying and managing resources so that a company's goods and services create more value for its customers than its competitors do. 

A company that analyzes its internal organization will know what it can do: 

Analyze the internal organization: 

Creation of value: companies seek to produce goods and services that create more value for their customers than their competitors do.

Resources: these are the assets of the company.

Capabilities: the company combines its tangible and intangible resources to create capabilities. These are usually developed in specific areas (marketing, production and R&D) or functional areas. 

Core competencies: those that give rise to a company's competitive advantage over its rivals. They are the activities that a company performs well in comparison with its competitors, giving them unique added value to what it sells to its customers. 

Construction of central competences: there are two ways:

·       Tangible resources: machinery, buildings, physical attributes 

·      Intangible resources: assets that are not physical for example skills

·      Capabilities: the mixed of intangible resources and tangible resources

·      Having sustainable competitive advantages has been difficult nowadays because of some factors in the global economy such as globalization 

·      4 sources of a company’s advantage: valuable capabilities, singular capabilities, expensive capabilities and irreplaceable capabilities 

·      A company has to multitask between managing their current resources and develop new ones