Topic 1 Grant- Resource and capability

Grant, Robert M., (1991) "The resource-based theory of competitive advantage: implications for strategy formulation" from California Management Review 33 (3) pp.114-135, Berkeley, Calif.: University of California ©

The purpose of this model is to provide a tool to analyse what makes a product or service successful within a certain industry and what resources and capabilities your orgnaisation has that will help them meet the industry success factors. The combination of company resources coupled with your ability to utilise them with identify your competative advantage and thus your strategy.

This is a visual tool which helps us to quickly and effectively identify any resource/capability gaps between our business and the industry key success factors.

Resources are what you have as a business and they can fall under 3 different catagories

Tangible: Property, Financial assets, RAW MATERIALS

Intangible : Reputation, Brand equity, Intellectual property

Human : Culture, Team work, Knowhow

Organisational Capabilites : This is what we do with the resources we have


Whilst this looks like a complex model it is important we break it down into its component parts.


Step 1. Identify 2 or 3 Key industry success factors – these are the essential elements a product or service requires to be successful within the marketplace.


Step 2. Identify your business key resource required to meet the industry success factors i.e. if you are in baking industry how good a baker are you / your team?


Step 3. Mark your resources from 1-5 in terms of how close they meet the industry key success factors 1 being weak 5 being high


Step 4. Critically review any resources you scored below 4 – how can you improve these?


Step 5 – Now look at your capabilities ( Tip a resource is what you have , a capability is what you do with it)


Step 6 – Mark you capabilities from 1- 5


Step 7 - Critically review any resources you scored below 4 – how can you improve these?

Additional Resources

This is a complex model and as such there is the possibility to go into great detail. We have looked to simplify the model to make it easier to apply and be useful to business planning, however if you wish to understand better the mechanics of the model here are a few additional resources.

To understand more about Resources and Capablities please check out the short online videos

4 min explainer video

A much more in-depth explanation can be found at the following link , however please note this goes into a lot more depth if you are interested in this area.

14 min deep dive explainer video.