Managing capability - Essay Example

The organizational capabilities are the typical analysis and assessment of the skills, potentials and the effort exhibited by the employees in the firm. The capabilities have the complete evaluation of the employees and the resources for the assurance of profitability and productivity. The organizational capabilities depend on the achievement of the organizational goals effectively and efficiently. The organizations play a vital role in routing these capabilities and they are the result of the interlinked routings.

The analysis of the task is at ease in comparison with the creation of capability. The analysis starts with the questions related to the functioning, activities performed and the current performance. “The field of strategic management deals with understanding the ways how firms achieve competitive advantage and how they create superior value.” (Arndt, 2008). In this study the main aim is to identify the capability and how it is related to the competitive advantage, different tools and the frame work.

The organization that is analyzed is Toyota, where the task is to identify the different capability and the contribution to the competitive advantage, and analyzing the different functional areas of them. “Toyota believe the potential for growth in our industry is extremely promising.” (Psabilla, 2007). The competitive advantage of the firm is the dependency of the firm on the revenue and the profitability of the firm. A firm is said to own competitive advantage when profit of the firm is greater than the average revenue.

The aim of any business unit is to have a sustained competitive advantage. This is shown in fig-1 According to Michael porter, competitive advantages are of two types; they are the cost advantages and the differentiation advantages. The cost advantages are those when the firm is capable of marketing and selling the products with the same