What are Business Capabilities and How to Identify Them?

Definition of Business Capabilities

Business Capabilities describe the core skills and competencies a company possesses to achieve specific goals and outcomes. They are abstract concepts that represent what a company can do, regardless of the people, processes, and technologies used to realize these capabilities. Business Capabilities are a crucial concept in strategic management and enterprise architecture.

The Importance of Business Capabilities

Identifying business capabilities is essential to understanding a company’s strengths and weaknesses, developing strategic plans, and ensuring that resources are used efficiently to gain competitive advantages.

How to Identify Business Capabilities?

The identification of business capabilities is a structured process that involves various approaches and methods to gain a comprehensive understanding of a company’s abilities.

1. Analysis of the Business Model


Gain an overview of the main activities, partners, resources, and the value the company creates for its customers.


  • Analysis of Business Strategy: Review the documented business strategy to understand the strategic objectives, mission, and vision of the company.
  • Review of Business Areas: Analyze the various business areas and their roles in the overall business.
  • Consideration of Value Propositions: Evaluate the products or services the company offers and the value they have for customers.

2. Interviews and Workshops with Executives and Employees


Gain valuable insights into the company’s capabilities through direct exchange with internal stakeholders.


  • Planning and Conducting Interviews: Prepare structured interview questions and conduct interviews with key persons from different departments.
  • Organize Workshops: Conduct workshops with various teams to understand their perspective on the capabilities and challenges of the company.

3. Consideration of the Value Chain


Identify the core activities and capabilities of the company that contribute to customer benefit.


  • Analysis of the Value Chain: Break down the value chain into individual segments and analyze the activities and processes in each segment.
  • Identification of Key Activities: Determine which activities are crucial for value creation.

4. Analysis of Resources and Competencies


Obtain a detailed overview of the company’s existing resources and competencies.


  • Resource Audit: Conduct a resource audit to identify existing internal and external resources.
  • Competency Analysis: Evaluate the skills and competencies of staff and the organization as a whole.

5. Benchmarking


Gain further insights into the necessary capabilities by comparing with competitors and other companies in the industry.


  • Competitive Analysis: Analyze competitors and their capabilities.
  • Industry Analysis: Study industry trends and standards to determine the required capabilities.

Examples of Business Capabilities

  • Product Development Capability: Refers to a company’s ability to develop and launch new products.
  • Customer Management: The ability to effectively manage relationships with customers and provide high customer service.
  • Operational Efficiency: The ability to efficiently and effectively design and execute internal processes and operations.
  • Marketing and Sales: The ability to successfully market and sell products and services.
  • Supply Chain Management: The ability to efficiently manage and optimize the supply chain.


The mentioned steps and methods are practical approaches for identifying business capabilities. This analysis enables companies to better understand their strengths and weaknesses and provides a solid foundation for strategic planning and prioritizing investments and resources.

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