Achieving Competitive Advantage Through Strategy

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The response address the queries posted in 1014 words with references.
//Before writing about the Organizational Capabilities, it is essential to know about the Competitive Advantage of a firm. One should know about the main aspects of competitive advantage, which further will assist in analyzing the Organizational Capabilities in an effective manner//

Achieving Competitive Advantage through Strategy

Introduction

Competitive Advantage refers to a superior position that a firm occupies due to some factor, function or activity against its competitors. It can be divided into two types; cost advantage or cost leadership and differentiation advantage. Cost advantage or cost leadership takes place when a firm is able to supply goods and services at a lower price than its competitors and differentiation advantage occurs when a firm is able to provide better goods and services at the same price as charged by its competitors (Porter, 2004). Both the advantages together form a positional advantage to the firm as a leader in the industry either in differentiation or cost.

//Above is the discussion of Competitive Advantage of a firm. Now, as per the directions, explanation about the organizational capabilities is to be discussed//

Organizational Capabilities

There are some intangible assets or capabilities also, such as fast & better customer service, innovation, etc., which help an organization in building superior market value. An effective investment in human resource functions like staffing, training, compensation and communication ensues into generating firm's capabilities. These capabilities can not be copied by the competitors as they can do with technology, product strategy and others. Organizations build their capabilities by combining the abilities and competencies of its individuals (Ulrich, & ...