Strategic Capabilities and External Forces: A Comprehensive Review

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Author Note

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Review of Literature
Strategic Capabilities
Strategies are deployed by the different organizations in order to be successfully being
able to compete in the business environment for various returns which comprise of aspects like
the market share, the revenue, the customers and various related tactics (Bryce 2017). Hence, it
is the duty of the leader to ensure that he is successfully being able to shape various strategies for
the organization and be able to assure that the firm is being able to come up with various
advantages which would benefit the organization in the long run. Hence, according to Hitt,
Ireland and Hoskisson (2016), strategic capabilities can be rightfully referred to as the strengths
of the company, the people, the skills as well as capacities which provide a competitive edge to
the firm and are able to see to it that the firm is being able to perform very well. Moreover,
Engert, Rauter and Baumgartner (2016) states that the Strategic capability can be defined as the
overall ability of the business to harness the different resources in order to ensure that the firm is
being able to achieve its goals and be able to focus on the assets of the firm which will help it in
engaging in long term success. Moreover, there is no single method for measuring the strategic
capability of the organizations.
In the given section, the different Strategic capabilities which an organization may
comprise of have been discussed in the following section.
Thriving in the International Market
As discussed earlier, the strategic capability of an organization may assist it in growing
financially and help the firm in prospering well irrespective of the various strategic limitations

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which exist in the market regarding aspects like competition and the various legislations and
regulations.
Identification of Critical Competencies
There are a large number of critical competencies which can contribute towards ensuring
that the strategic competency and capability of a business can be enhanced (Steiss 2019). The
aspects like cash, patents and related property also contributes towards ensuring that a firm is
able to deploy the right kind of strategies and is being able to perform well in the long run.
Strategic Value Analysis
Just having the strategic capability is not enough and any organization which aims to
ensure success in the long run would be required to have an assessment of the strategic
capabilities which is indeed a complex procedure. The procedure of evaluating the overall
business strategic capability can be defined as the strategic value analysis. As the requirements
of the business have been changing to a great extent, the analysis must ensure that they are
successfully being able to conduct a strategic analysis and enhance the overall strategic
capability of the business (Zhao et al. 2017).
Aspects of the Strategic Capability
The strategic capability may comprise of a number of factors involved in the business and
may comprise of factors like the Manufacturing of the product or the service delivery which
assists in ensuring that a firm is being able to manufacture in the right manner and engage in
adequate service delivery as well. The strategic capability of the business also lies in its supply
chain management whereby the firm would be required to ensure that it is being able to have a
good control over its supplies (Ansoff et al. 2018). The other strategic capabilities of a business
are often focused on the Research and Development along with the skills of the employees and

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managers. With respect to this, it can be rightfully mentioned that, all the employees of a firm
are required to be skilled adequately which will help in seeing to it that the firm is being able to
have a good standing in the market (Zhao et al. 2017).
External forces
The businesses do not operate in a vacuum but they rather govern in a dynamic
environment which tends to have a great impact on the manner in which the firm tends to operate
and also acts as a deciding factor of whether the firm will be able to achieve long term success or
not. The different factors which generally govern the external environment can be contributed to
have various factors like the Political, Social, Economic, Legal, Technological and demographic
factors. Each of these factors has been known to have a very strong impact on the overall
operations of the firm (Hitt and Duane Ireland 2017). The business and the related managers
have a large control over the internal environment of the firm which then tends to impact the
operations of the organization. The managers make use of the various skills which they possess
in order to maintain the overall internal environment of the firm however, the primary
management of the firm deals with the external factors as the business is generally not able to
manage these overall factors. The next section will examine the different external environment
factors which will have an impact on the overall performance of the business.