Thus, resources and capabilities that constitute the basis for
competitive advantages and superior profitability have the following properties:
. They are valuable. they enable the firm to exploit an external opportunity or to
neutralize an external threat.
. They are rare: perfect competition for them has not yet set in.
. They are imperfectly imitable and non-substitutable: competitors face a cost
disadvantage in imitating or substituting them.
. The company is organized to exploit them: the firm’s structure and control
mechanisms are aligned so as to give people ability and incentive to exploit them.
. They are sufficiently large: they address market segments that are sufficiently
large to cover organizational fixed costs.
. They enable the company to address customers’ unmet needs: a need is unmet if
customers perceive it as simultaneously high in importance and low in
satisfaction.