Capabilities as Components of Competitive Strategy in the Portuguese Service Sector

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The resource-based view (RBV) of competitive strategy emphasises the importance of unique firm resources and associated capabilities to the formulation of competitive strategy. This cross-sectional study seeks to determine whether or not the pattern of usage of competitive methods related to marketing, information technology and flexibility in the Portuguese service sector aligns with the resource-based view. Fifteen service-related competitive methods are identified. Surveyed firms were asked to indicate the degree of relevance of these competitive methods to their competitive strategy. Exploratory factor analysis and structural equation modelling indicates that these methods represent four underlying strategy dimensions that reflect some of the dynamic capabilities suggested by the resource-based view. In addition, cluster analysis revealed that each of the responding firms could be classified into one of three capability orientations. Some implications of these findings for strategy development in the Portuguese service sector are discussed. Limitations of the study and areas for future research are also presented.