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

Ostrander Pharma wants to assess whether its research capability is a threshold capability or a unique resource. Which test best identifies a threshold capability?

A threshold capability is one needed just to compete and is also held by rivals, so it provides no advantage by itself. If Ostrander's research ability is matched by every competitor, it is threshold; rare, inimitable capabilities would instead be unique resources.

  1. AIt is needed just to compete in the market and is also held by rivals, so it gives no advantage on its ownCorrect
  2. BIt is rare and cannot be imitated by competitors
  3. CIt generates the highest profit margin in the firm
  4. DIt is based on tacit knowledge held by one person

Explanation

Threshold capabilities are the minimum required to meet customers' basic requirements and to stay in the market. They are held by competitors and do not distinguish the firm. Rare and inimitable capabilities are unique resources or core competences.

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