Skip to content

Strategic Business Leader · The internal resources, capabilities and competences of an organisation

Resources, Capabilities and Competences in ACCA SBL Explained

Updated 11 October 2026 · Fact-checked

Resources are the assets an organisation owns or can access, tangible or intangible. Competences are the activities and processes through which it uses them. Strategic capability combines resources and competences to meet customer needs. Threshold items let you compete; unique resources and core competences give advantage rivals cannot easily copy.

Understand Resources, Capabilities and Competences

Start with a simple chain. An organisation has resources. It uses them through competences, which are the activities and processes it carries out. In the Johnson, Scholes and Whittington approach, resources plus competences make up strategic capability: what lets an organisation survive and prosper by meeting customers' needs.

Tangible resources are physical and financial assets you can see and count. Examples are plant, buildings, stock, cash and IT hardware. Intangible resources have no physical form. Examples are brand, reputation, patents, customer data, software, relationships and the knowledge held by staff. Human resources (skills and experience) are often treated as their own category. Intangibles often matter more for advantage because they are harder to copy and often missing from the statement of financial position.

Threshold resources and capabilities are the minimum needed to meet customers' requirements and so continue to compete in a market. A bank needs a licence, branches or a digital platform, and basic systems. Having them does not make you better than rivals. Unique resources and core competences are those that rivals do not have or cannot easily imitate, and that customers value. They are the basis of sustainable competitive advantage. Be careful: a threshold item can become a source of disadvantage if you lack it, but it will not by itself give you advantage.

Capabilities are about how resources are deployed. Owning good assets is not enough. Two firms can hold the same machines and get different results because of different processes, culture and skills. Competences are the activities and processes through which resources are used. Core competences are the competences that underpin advantage. They are valuable to customers, rare and hard to imitate. Prahalad and Hamel also stress that they can be extended into new markets. They often come from how activities link together, and from accumulated knowledge, not from any single asset.

In SBL, you apply this to the case. Identify the resources, judge which are threshold and which are unique, and say what that means for strategy, risk and the future.

Key rules to remember

Capability chain
Resources + Competences (activities and processes) → Strategic capability → Competitive advantage (where unique and hard to imitate)
A memory aid for how the terms link. Resources alone do not create advantage.
Resource types
Tangible (physical, financial) | Intangible (brand, IP, knowledge, relationships) | Human (skills, experience)
Always give a case-based example for each type you name.
Threshold vs unique
Threshold = needed to compete at all | Unique = valuable and hard to imitate, source of advantage
Threshold items are needed to compete but do not by themselves give advantage. They can still be critical to survive.
Test for a core competence
Valuable to customers + Rare + Hard to imitate + Non-substitutable
A VRIN/VRIO-style checklist. VRIO itself tests value, rarity, inimitability and organisation. Extendability to other markets is an extra Prahalad and Hamel criterion. Name the test you use.

How to solve Resources, Capabilities and Competences questions

Use this method for any SBL requirement on resources, capabilities or competences. Tie every point to the case.

  1. 1Read the requirement. Decide if it asks you to identify, evaluate, advise or criticise.
  2. 2List the resources in the case. Group them as tangible, intangible and human.
  3. 3Mark each as threshold or potentially unique. Ask: do all rivals have this? Could they copy it?
  4. 4Identify the competences. Look for activities and processes that use the resources well, such as logistics, design or service.
  5. 5Test the important ones: valuable, rare, hard to imitate and non-substitutable. Add extendability to new markets if the requirement is about growth.
  6. 6Link to strategy. Say how these support the chosen strategy, or where gaps need acquisition, partnership or training.
  7. 7Add risks and limits. Consider imitation, loss of key staff, rigid competences, and threshold items that are falling behind.
  8. 8Conclude with a clear recommendation. Show professional skills by being concise and commercial.

Quickest way: Three-column scan under time pressure

When to use it: Use when you have few minutes to plan a short requirement, or when the case is long.

  1. Draw three columns on your plan: Resource, Threshold or Unique, Evidence in case.
  2. Fill in four to six items quickly, mixing tangible, intangible and human.
  3. Circle the one or two that look unique and ask why rivals cannot copy them.
  4. Write one line on what the organisation should do: protect, build or acquire.
  5. Write your answer using those items, each with a case fact and a conclusion.

Common mistakes in Resources, Capabilities and Competences

  • Listing resources without saying whether they are threshold or unique.

    Students stop at definitions because they are easy to recall.

    Fix: For every resource, add one line: do rivals have it, and can they copy it? That judgement earns the marks.

  • Treating resources, capabilities and competences as the same thing.

    The terms are used loosely in textbooks and in practice.

    Fix: Say resources are what you have, competences are the activities and processes that use them, and strategic capability is the resources and competences together. Use the case to show the difference.

  • Naming only tangible assets.

    Tangible items are easy to spot in the case and on the balance sheet.

    Fix: Look for brand, data, relationships, culture and staff knowledge. These are often the real source of advantage.

  • Calling every strength a core competence.

    Students want to sound positive about the organisation.

    Fix: Apply the tests: valuable, rare, hard to imitate, non-substitutable. Say plainly when something is only threshold.

  • Ignoring that a competence can weaken or become a rigidity.

    Students assume advantage is permanent.

    Fix: Comment on imitation, changing markets, loss of key staff and over-reliance on one skill. Advise how to renew it.

Worked examples

Example 1

A regional airline owns 20 aircraft and holds landing slots at a busy airport. It has a well-known brand, a loyal customer base and a crew with a strong safety and punctuality record. Competitors can lease aircraft easily, but landing slots at that airport are fully allocated. Classify these as tangible or intangible, and as threshold or unique. (10 marks)

Show the solution
  1. Aircraft: tangible. Rivals can lease similar aircraft, so this is a threshold resource. It is needed to compete but gives no lasting edge.
  2. Landing slots: they are a right, so treat them as an intangible resource. They are fully allocated, so rivals cannot easily obtain them. This is a unique resource, at least while the allocation holds.
  3. Brand and customer loyalty: intangible. Built over time and hard to copy quickly. Likely unique, but only valuable if service quality is maintained.
  4. Crew record for safety and punctuality: this is a human resource and also a competence, as it comes from training and processes. It is hard to imitate because it rests on culture and routines. Likely a core competence.
  5. Judgement: the airline's advantage rests on slots, brand and crew competence, not on aircraft. Risk: slots depend on regulation, and the brand depends on keeping standards high.

Answer: Aircraft are tangible and threshold. Landing slots, brand and loyal customers are intangible and likely unique. The crew's record is a human resource and a core competence. Advantage comes from the intangibles and competences, and the airline should protect slot rights and maintain service standards.

Example 2

A furniture maker has modern factories, good cash reserves and a skilled design team. Rivals have similar factories and cash. Management says its factories are its core competence. Advise whether this is correct. (8 marks)

Show the solution
  1. Define the test: a core competence is valuable to customers, rare, hard to imitate and non-substitutable. Extendability to new markets is a further test.
  2. Apply to factories: they are tangible. Rivals have similar ones and could buy more, so they are easy to imitate. They are a threshold resource.
  3. Apply to cash: also tangible and also held by rivals. Useful for flexibility but not a source of advantage on its own.
  4. Apply to the design team: skilled people and the way they work together are hard to copy fast. If customers value the designs, this is a likely core competence.
  5. Link to action: management should stop treating factories as the advantage. It should protect and develop the design team, for example through retention packages, training and knowledge sharing, and consider using the design skill in new product ranges.
  6. Add caution: design skills depend on key individuals, so there is a risk if they leave.

Answer: Management is not correct. Factories and cash are threshold resources that rivals match. The design team, and the processes that turn its skill into products customers value, is the likely core competence. The firm should invest in retaining and developing it.

Exam tips

  • Always tie each resource to a fact in the case. Generic definitions earn few marks.
  • Use the threshold versus unique distinction as your main analysis. It shows judgement.
  • Look for intangibles and human skills first. The case writer often hides the real advantage there.
  • Show professional skills by giving a clear, commercial recommendation, not just a list.
  • If the requirement mentions sustainability of advantage, discuss imitation, substitution and the need to renew competences.

Practice questions from The internal resources, capabilities and competences of an organisation

Resources, Capabilities and Competences in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Resources, Capabilities and Competences: frequently asked questions

What is the difference between resources and competences?

Resources are the assets an organisation has, such as plant, brand, cash and people. Competences are the activities and processes through which it uses those resources well. In an answer, show the resource and then the competence it supports.

What is the difference between threshold and unique resources?

Threshold resources are the minimum needed to compete in a market, and rivals usually have them. Unique resources are valuable and hard for rivals to copy, so they can give lasting advantage. Meeting threshold levels only keeps you in the game.

Are capabilities and competences the same in SBL?

The terms overlap and are often used together. Capability is the broader ability to deploy resources to meet customer needs. Competences are the specific activities and processes behind it. Explain which sense you use and stay consistent.

Can an intangible resource be a threshold resource?

Yes. For example, a basic operating licence or a standard IT system may be needed by all rivals. Being intangible does not make a resource unique. Judge it by whether rivals have it and can copy it.