The resource and capability strengths/importance matrix (Grant)

Robert Grant’s matrix evaluates resources and capabilities on two dimensions: their importance to competitive advantage and the company’s strength relative to competitors. It distinguishes strategically useful strengths from impressive but irrelevant ones.

When to use it

• Use it whenever strategy depends on understanding what the organisation owns, knows and can do better or worse than rivals.

Origins

Grant developed the tool from the resource-based view of strategy. His framework begins with resources and capabilities, evaluates their contribution to advantage, selects a strategy that exploits them and identifies gaps requiring investment. The strengths/importance matrix turns that logic into a practical visual diagnosis.

What it is

Resources are productive assets controlled by the firm. They may be tangible, such as land, buildings and equipment; intangible, such as brand, data and intellectual property; or human, such as expertise and relationships.

Capabilities are repeatable ways the organisation deploys resources to accomplish work. Product development, purchasing, production, sales and marketing capabilities arise from combinations of people, processes, knowledge and assets.

The matrix applies primarily to a whole business or strategic business unit. The value chain (Porter) provides a more granular segment-level activity view. At corporate level, the same matrix can test whether shared capabilities at the centre create value for the business units.

How to use it

First identify the resources and capabilities that underpin the key success factors in the chosen market. Use value-chain analysis and interviews across functions so the list includes operational combinations, not only assets visible on the balance sheet.

Next rate strategic importance: how much does each item affect customer value, cost, resilience or another genuine source of advantage? Then rate relative strength using competitor evidence and, where possible, benchmarking rather than internal pride.

The resource strengths/importance matrix

Key

Resource Capability

Interpret the quadrants:

• Important and strong: potential sources of advantage to exploit, protect and deepen.
• Important and weak: priority gaps to build, acquire, partner for or redesign around.
• Unimportant and strong: potentially superfluous strengths; redeploy, monetise or stop over-investing.
• Unimportant and weak: low-priority weaknesses that normally require no major response.

Turn the diagnosis into choices. Decide how to use key strengths in the value proposition, how to close critical gaps and whether a superfluous asset has greater value through sale or another use. Revisit importance as the market changes; a capability can move between quadrants when technology or customer needs shift.

Top practical tip

Start from market success factors, then identify and benchmark the resource combinations and capabilities that actually produce them.

Top pitfall

Possession is not performance. Advantage comes from deploying and renewing resources effectively; see Core competences (Hamel and Prahalad).

Further reading

• Grant, R.M. (nineteen ninety-one). “The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation.” California Management Review.
• Grant, R.M. (twenty twenty-two). Contemporary Strategy Analysis. Wiley.