Capabilities as marketable assets: A proposal for a functional categorization Keith Blois ⁎ , Rafael Ramirez 1 Templeton College, University of Oxford, Oxford, OX1 5NY, United Kingdom Received 1 August 2005; received in revised form 1 May 2006; accepted 1 June 2006 Available online 21 July 2006 Abstract While it is through creating and marketing products that firms achieve success, there are also significant opportunities for them to create value by exploiting the capabilities they utilize in creating products. However, seeing capabilities in this light demands new ways of thinking about product markets and marketing policies. © 2006 Elsevier Inc. All rights reserved. Keywords: Capabilities; Assets; Value creation 1. Introduction Although firms exist to help customers and organizations to create value they only do so in order to capture part of that value for themselves. Therefore, capabilities – that is “repeatable patterns of action in the use of assets to create, produce, and deliver offerings” (Ramirez and Wallin, 2000) – only become distinctive competencies 2 when they create value for the firm and other organisations with which the firm relates or wishes to relate 3 to in ways that competitors find impossible or difficult to imitate. The debate about capabilities is rooted in Resource Based Theory (RBT). It has been stated that: “A central premise of resource-based theory is that rival firms compete on the basis of their resources and capabilities” (Peteraf & Bergen, 2003). However, there is considerable variation within RBT over the exact meaning of terms such as ‘resources’ and ‘capabilities’. For example Helfat and Peteraf (2003) provide separate definitions for these two terms, but Peteraf and Bergen (2003) used the terms ‘resources’ and ‘capabilities’“inclusively and interchangeably”. Indeed, there has been little progress in defining capabilities since Richardson (1972) commented that “the notion of capability is no doubt somewhat vague”. Peteraf and Bergen (2003) argued that ‘capabilities’ should encompass a wider range of assets or resources than writers such as Barney (1991). Furthermore, although many writers like Peteraf (1993), do not see capabilities as tradable, we believe that capabilities – as well as enabling suppliers to create value in sustainable ways – can also be treated as independent elements in exchanges with customers. In other words, capabilities, as pointed out by Gibbert, Golfetto, and Zerbini (2005), should be seen not only as resources facilitating the creation of offerings but also as offerings or parts of offerings in their own right. As the value of a resource rests on its deployment in a particular product market, this interpretation of capabilities has a particular relevance to marketing policies. Discussions of capabilities have to take into account that they can take many forms such as physical assets, skills, technolo- gies, productive routines and managerial competences. As a result, a balance has to be struck between analysing specific examples and making sweeping generalizations. In this article (which is intended to be exploratory) we put forward a categorization of capabilities which we hope will provide useful managerial insights into how they can add value. Industrial Marketing Management 35 (2006) 1027 – 1031 ⁎ Corresponding author. Tel.: +44 1865 422700; fax: +44 1865 422501. E-mail addresses: keith.blois@sbs.ox.ac.uk (K. Blois), Rafael.ramirez@templeton.ox.ac.uk (R. Ramirez). 1 Tel.: +1 865 422765. 2 This article follows Peteraf and Bergen (2003) in using this term to include “skills, technologies, and more intangible endowments such as productive routines”. 3 A firm might decide to use its capabilities to improve its relationship with any party (e.g. customer; supplier; regulator; etc.) with which it interacts but, for ease of expression, this article will refer to the firm using its capabilities in relation to its customers. 0019-8501/$ - see front matter © 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2006.06.004