Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers go to the restaurant just for the appetizer, and it was at the center of a recent highly positive review by a food critic. Preparation involves common ingredients and average culinary skills but requires a very high oven temperature, which significantly increases utility costs. Several competing restaurants have since added their own version of the appetizer to their menu. Which of the following criterion for assessing capabilities/core competencies is met? a. The restaurant has the capability to develop something that is valuable. b. All of these criteria are met. c. The restaurant has the capability to develop something that is costly to imitate. d. The restaurant has the capability to develop something that is rare.

The reason is that their are a lot of competitors that will be offering the similar products to the same customers but the minor uniqueness of the product gives the competitive advantage over the other products in the market. This means that the competencies or capabilities are the strength which the firm possesses to do a job that is valued by the customers. If I can make a chair that is not my strength because the strength is that the customer valuing that chair manufacturing. If the customer values the product then I will have to spent fewer dollars on advertisements. Strength, capabilities and competencies bring costs controls and higher profits due to mass productions because the product is valued by the customers.