Capabilities are non-substitutable when:
A) there are no direct substitutes in the five forces model.
B) the firm's products cannot be a substitute for others' products.
C) the switching costs in the industry are very high.
D) they do not have strategic equivalents.

Question

Quizplus · Accepted Answer

Capabilities are non-substitutable when they do not have strategic equivalents, meaning that there are no other ways to replicate or achieve the same outcomes as the firm's unique capabilities. This is what makes them a source of sustained competitive advantage for the firm. The other options listed may contribute to a firm's competitive advantage but do not necessarily relate to the non-substitutability of its capabilities.

Capabilities Are Non-Substitutable When