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MT1: The Internal Context of Strategy and the Firm’s Resources and Capabilities

The value of the SWOT analysis in gaining a competitive edge.

The value of the SWOT analysis in gaining a competitive edge is that it allows a firm to understand their own resources and abilities and use them to develop a strategy which will give them a competitive edge, and improve performance (Carpenter, Sanders, 2008). “SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive environment in which the firm operates” (Ifediora, Idoko, & Nzekwe, 2014). The reasoning in the text and in the article, are very similar in that they both identify the SWOT analysis as a tool to identify a forms internal resources that can be used as a competitive advantage. Of course, the resources should feed into the strategy that will identify the actions which will give the firm a competitive edge.

Alan Murray on the 5-cubed model and its contribution to the discussion of SWOT.

The 5-Cubed model is meant to provide “radical shifts in business direction, where appropriate, and incremental shifts when they are not” by providing five constraints, which include customers, context, change, competition, and capabilities (Murray, n.d.). Based on the model provided, the first five constraints are considered, then 5 choices are identified from those constraints, and each choice triggers another five considerations for each choice (Murray, n.d.). The shifts are, ultimately, dependent on the five considerations that are created in the third stage of the process. In this manner, the 5-cubed model is linking specific external factors with specific internal factors in order to develop direction for a business (Murray, n.d.). The SWOT analysis may be more generic in that it does not specifically specify any exact factors.

How are the firm’s resources and capabilities – valuable, rare, inimitable or non-substitutable, or exploitable?

Valuable, rare, inimitable or non-substitutable, exploitable are combined as used for the VRINE Model, which is an “analytical framework suggesting firms with VRIM resources and capabilities will gain a competitive edge” (Carpenter, Sanders, 2008, p. 73).

In terms of the simulator, our company can could develop a proprietary feature on, one of our cars, that no other firma can replicate, thereby, giving our firm a competitive edge. In this manner, we would have a rare product, which cannot be replicated, and cannot be substituted. Through marketing campaign, the proprietary product can be exploited to its full extent.

Define dynamic capabilities and explain their role in both strategic change and a firm’s performance.

Dynamic capabilities “are processes in which a firm integrates, reconfigures, acquires, or divests resources in order to achieve new configurations of resources and capabilities” (Carpenter, & Sanders, 2008, 81). The concept of dynamic capabilities reminds me of continuous improvement in which you develop your internal resources by (attempting to) improving on the way the recourses are utilized. The improvements can be triggered as a result of a change in the business environment or due to the company’s internal and/or external needs.

Interesting enough, Giniuniene, and Jurksiene (2015), utilized a model to show the relationship between dynamic capabilities and firm performance with the link being organizational learning and innovation (988). Put simply, dynamic capabilities trigger organizational learning, which triggers innovation, which influences firm performance. In this manner, dynamic capabilities can be tied to continuous improvement.


Carpenter, M.A., & Sanders, W.G., (2008). Strategic Management: A Dynamic Perspective –

Integrated Stratsim Simulation Experience. Upper Saddle River, NJ: Pearson Prentice Hall.

Giniuniene, J., & Jurksiene, L., (2015). Dynamic capabilities, innovation and organizational

learning: interrelations and impact on firm performance. Procedia – Social and Behavioral Science. 213, pp. 985-991. Retrieved from

Murray A.I., (n.d.). Strategic Choice under knowledge competition. Retrieved from

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