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

Kestrel Retail has a distinctive store-experience capability. Analysts say competitors cannot copy it because it grew from years of unique history, and its exact link to performance is hard to identify. Which feature of strategic capability does this reasoning describe?

The reasoning describes causal ambiguity and path dependency. The capability grew from a unique history and rivals cannot tell exactly which elements drive performance, so imitation is hard. This makes the capability a source of sustainable competitive advantage rather than a threshold resource.

  1. ACausal ambiguity and path dependency making imitation difficultCorrect
  2. BExcess capacity in threshold resources
  3. CLow switching costs for customers
  4. DVertical integration of the supply chain

Explanation

Capabilities that are rooted in unique history (path dependency) and whose link to success is unclear (causal ambiguity) are hard for rivals to imitate, supporting sustainable advantage. The other options do not concern imitability of capability.

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