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Internal analysis

Strategic capabilities

A key part of being able to create a strategy is understanding the internal position of
the organisation – what it is capable of and which assets and resources it controls.
This will help the business to decide what strategies are possible for it to undertake.

1.1 Resources

Resources

These can be identified using the M’s model (resource audit).

There are two main types of resource:

 threshold – things the business must do well simply to compete in
the market. They do not give competitive advantage

 unique – things the business does well that give a competitive edge
over rivals. Sometimes referred to as the ‘order-winners’.

1.2 Competences

These are groups of abilities, skills or resources that enable the
organisation to act effectively.

There are two main types of competence:

 threshold – things the business must do well simply to compete in
the market. They do not give competitive advantage

 core – things the business does well that give a competitive edge
over rivals. Sometimes referred to as the ‘order-winners’.

An organisation’s core competences tend to become threshold over time
as rivals copy them and customer needs and expectations change. This
means that they need to be monitored regularly.

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