A capability-based view of competitive heterogeneity

Abstract

The question of how firms differ is paramount to strategy scholars. This question has motivated empirical research on the factors influencing performance differences among close competitors. It also has motivated work on factors that increase or decrease the mean performance of firms in an industry. Theories about resources and capabilities tend to dominate discussions of heterogeneity in performance and superior performance. Yet, the strategy field lacks a cumulative body of empirical work showing how firms differ. This article derives conclusions and questions from empirical work on capabilities. We then discuss work that complements but lies beyond the boundaries of traditional capabilities research. We conclude by suggesting approaches to and areas of future work.