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CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment

Anaya Retail, an Indian apparel chain, notes that its tie-up with local weavers, its brand image and its trained store staff together let it deliver unique products at lower cost than rivals. In strategic management terms, what are these bundled skills and resources that give it superiority called?

They are called distinctive competence, which results from capabilities, i.e. resources combined and used effectively so the firm performs better than rivals. Threats come from the external environment, SBUs are business divisions, and entry barriers are industry features, so none of those describe this.

  1. ADistinctive competence resulting from capabilitiesCorrect
  2. BEnvironmental threats
  3. CStrategic business units
  4. DBarriers to entry

Explanation

Capabilities arise when resources are combined and used effectively; those that let a firm do something better than rivals form its distinctive competence. Threats, SBUs and entry barriers are not internal skill bundles.

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