ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation
Elmstead Bank identifies that its ability to integrate acquisitions quickly is a dynamic capability, whereas its branch network is a threshold resource. Which statement best explains the strategic implication?
Threshold resources, such as a branch network, are the minimum required to compete and bring parity. A unique, hard-to-imitate capability like fast acquisition integration can create competitive advantage, so Elmstead should treat the integration skill as the potential source of distinctiveness.
- AThe branch network gives sustained advantage while the integration skill only meets basic requirements
- BThe branch network is needed to compete at all, whereas the integration capability can be a source of competitive advantage if it is unique and hard to imitateCorrect
- CBoth are threshold capabilities and so cannot provide advantage
- DThe integration capability is a threshold resource because it is intangible
Explanation
Threshold resources are the minimum needed to compete in a market and give only parity. Distinctive capabilities such as complex, hard-to-copy integration skills can underpin advantage. The intangible nature does not make something a threshold resource.
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