5 What are your unique capabilities?

A business’s capability is essentially its ability to ‘deploy resources effectively’ (Menguc et al., 2014, p. 315) in order to achieve its desired goal. If we consider the wide range of resources available to a business, from the people to the financial and everything in between, it is clear that a business’s capabilities should be understood broadly to include any of the following:

• Skills and knowledge

• Machinery and technology

• Managerial systems

• Values and norms

• Organisational processes

• Learning.

But why is this important? In essence, it is the unique utilisation and application of these capabilities that ‘may be at the root of why two firms that have similar resources obtain drastically different levels of performance’ (Menguc et al., 2014, p. 315).

Equally, as you reviewed this list you might have noticed that while some of the capabilities listed are quite tangible – machinery and technology, for example – others such as skills, knowledge and learning are quite intangible. Very often intangible capabilities are just as important as tangible capabilities, most particularly in knowledge-based businesses.

For you as an entrepreneur, the secret is to recognise your own capabilities and to understand how they are unique. It is these capabilities that will support your business model and enhance your unique value proposition.