Linking Resources and Capabilities to Competitiveness

Strategy Working

The current study identifies the theories linking corporate resources, capabilities to competitiveness and then applies them to GE Healthcare, a subsidiary of General Electric (NYSE: GE), henceforth called GE. Capella University published this paper in 2017. The analysis presented is still valid as of 2020, being an example of how to initiate a strategic analysis.

Theories on Resources, Capabilities, and Competitiveness

Thompson, Peteraf, Gamble, and Strickland (2016) described the means of analysis to determine if a company strategy works:

  • Analysis of the execution of strategic objectives and financials
  • Analysis of the company financials against the industry performance
  • Analysis of the competitiveness of the company.

Per Thomson et al. (2016), the company’s analysis continues with analyzing its resources and capabilities.  Per Thomson et al., resources are inputs to a company’s processes or assets used to create value for the company under the form of products sold or services rendered.  The assets could be tangibles (e.g., material, equipment) or intangibles (e.g., intellectual property, know-how).  On the other side, capabilities are capacities the company possesses to do an activity competently.  The capabilities can be functional (such as the capability to do research and development) or cross-functional (such as the capability to offer a customer a total business solution involving multiple departments).  Thomson et al. (2016) showed that resources and capabilities are competitive advantages that may be sustainable if they persist against competition’s efforts.  Thomson et al. described the test VRIN (valuable, rare, inimitable, and non-substitutable) applied to resources and capabilities to determine their competitive strength. Oliver (2016) showed that for high-velocity industries, the ability to adapt its resources and capabilities continuously is a capability as well, being able to produce a sustainable competitive advantage.  Additional analysis elements for the company’s competitiveness are the SWOT analysis, value chain analysis, and benchmarking.   Thomson et al. proposed a weighted chart against competition per the industry’s critical success factors to assess the company’s competitive strength.

Study Case: GE Healthcare

GE announced in 2014 (General Electric, 2014) a new strategic direction:

  • Consolidation of its business portfolio to reflect a contribution to EPS of minimum 75% industrial activities and maximum 25% financial activities
  • Stock buyback to increase the value of the stock
  • Cost-cutting activities to reduce operating costs
  • A new initiative to create GE Store, a business platform facilitating the transfer of technologies and know-how inside the corporation
  • A new digitization initiative by IT investments aimed at creating cloud applications and equipment and processes digital models.

Per General Electric (2017a), GE Healthcare Ltd. is a subsidiary to GE, having as capabilities (Medtrack, 2017):

  • Research, manufacturing, and services of medical imaging devices, information technologies, and medical diagnostics
  • Biopharmaceutical research, products manufacturing technologies
  • Drug discovery research
  • Patient monitoring systems research, manufacturing, and services
  • Performance improvement and solutions project services

Per GE Healthcare (2017a), GE Healthcare (2017b), Curran (2017), General Electric (2017a), Thomson et al. (2016), and General Electric (2017b), the resources of the company are:

  • The intellectual property
  • The research and manufacturing facilities
  • The scientists, doctors, and engineers working R & D
  • The GE brand, image, and reputation
  • The strategic relationship with hospitals
  • The support the subsidiary gets from GE Store and GE Global Research.

Per General Electric (2017a), Curran (2017), Thomson et al. (2016), and General Electric (2017b), for the past several years, GE Healthcare has been a broad differentiator in the US. However, on the global market GE Healthcare acted as a disruptor in emergent economies (Christensen, Raynor, &McDonald, 2015; Curran, 2017) by introducing CT scanners with minimal features, low prices, and adequate quality. In these markets, GE Healthcare created a blue ocean (Kim and Mauborgne, 2004).

Per Curran (2017), Medtronic PLC has the largest market share in the US (38.9%), while GE Healthcare is in second place with 22.2%.  For the year 2016, GE Healthcare has revenue growth of 16%, outpacing the industry growth of 2.7%.  Per Curran (2017), the industry had favorable conditions during the past five years because of the economy improving, technological advances, healthcare access improving, and population aging. Unfavorable conditions are the high cost of sale for equipment, making the market vulnerable to the economy slowing down. The favorable conditions are likely to continue for the next 3-5 years. GE Healthcare proves to be compliant with the corporate strategy set by the corporate company and successful at executing it.


The discussion presented the theories linking resources and capabilities to competitiveness.  These theories have been applied to GE Healthcare, a subsidiary of GE.  The study showed the resources and capabilities has, the industry’s competitive trends during the last several years, and determined that GE Healthcare is in second place in the US concerning the market share it has and has a significant growth in revenues.

References on Resources, Capabilities, and Competitiveness

Christensen, C. M., Raynor, M., & McDonald, R. (2015). What is disruptive innovation? Harvard Business Review, 93(12), pp. 44-53.

Curran, J. (2017). IBISWorld industry report 33451b medical device manufacturing in the US. Retrieved from IBISWorld database.

GE Healthcare (2016). Investor update. Retrieved from

General Electric (2014). A new kind of industrial company. Retrieved from

General Electric (2017a). GE 2016 Form 10-K. Retrieved from

General Electric (2017b). GE 2016 integrated summary report. Retrieved from

General Electric (2017c). Research and development (R&D). Retrieved from

GE Healthcare (2017a). GE Healthcare Press Releases. Retrieved from

GE Healthcare (2017b). Partners HealthCare and GE Healthcare launch 10-year collaboration to integrate Artificial Intelligence into every aspect of the patient journey. Retrieved from

Kim, W. C., & Mauborgne, R. (2004, October). Blue ocean strategy. Harvard Business Review82(10), pp. 76-84.

MarketLine (2017a). Company profile: General Electric. Retrieved from the Ebscohost database

Medtrack (2017). GE Healthcare. Retrieved from the database Business Source Complete.

Oliver, J. J. (2016). High velocity markets drive adaptive capabilities. Strategic Direction, 32(1), pp. 5-7.

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A.J. (2016). Crafting & executing strategy [ebook]. New York, NY: The McGraw-Hill Companies.

Dr. George Gafencu, DBA, PMP, DTM

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