ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation
Veltra Foods has operated for 40 years in a stable market. Its board notes that rivals are now entering with new digital channels and shifting customer tastes. The CEO argues the firm must develop an ability to sense threats and opportunities, seize them and reconfigure its resource base over time. Which concept does the CEO's argument describe?
The CEO is describing dynamic capabilities: the organisation's ability to sense changes, seize opportunities and reconfigure its resources and competences as the environment shifts. This differs from threshold resources, which only allow basic competition, and from rigidities, which hinder adaptation.
- ADynamic capabilitiesCorrect
- BThreshold resources
- CCore rigidities
- DStatic cost leadership
Explanation
Dynamic capabilities (Teece) are the ability to sense, seize and reconfigure resources and competences in changing environments. Threshold resources are only the minimum needed to compete, and core rigidities are the opposite problem, where past competences block change.
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