a resource represents a competitive asset that is owned or controlled by the company, whereas a capability is a competently performed internal activity that is developed through the deployment of the company's resources.

a resource usually resides in a company's technology and physical assets $($state$-$of$-$the$-$art plants and equipment, attractive real estate locations, and so on$),$ whereas a capability usually resides in a company's human capital, information capital, or organizational capital. a resource refers to a company's best$-$executed functional strategy, and a capability refers to a company's best$-$executed business strategy. a resource is a competitively relevant internal activity that a firm performs especially well relative to other internal activities, whereas a canability is a competitively important activity performed by key strategic allies.