Which concept describes the ongoing capacity to adapt and renew its resources to meet changing conditions?

• A. Core competence
• B. SWOT analysis
• C. Dynamic capability
• D. Benchmarking

Answer: (C)

The concept shown is dynamic capability. It captures the firm’s ongoing ability to sense changes in the environment, seize opportunities by reallocating and reconfiguring resources, and transform its routines and assets to stay competitive as conditions evolve. This isn’t just about having good skills or a strong product; it’s about continuously renewing and adapting the resource base—people, technologies, processes, and structures—to meet new threats and opportunities.

Core competences describe valuable, hard-to-imitate abilities a firm possesses, but they’re more about what the firm does well rather than its sustained process of adaptation. SWOT analysis is a planning tool used to assess strengths, weaknesses, opportunities, and threats, not an ongoing capability. Benchmarking is about comparing performance to others to improve, again not the firm’s inherent capacity to continually reconfigure itself. Dynamic capability specifically explains how firms stay resilient and competitive by evolving their resource base in response to change.