he difference between a resource and a capability is that Multiple Choice a resource refers to a companys best-executed functional strategy, and a capability refers to a companys best-executed business strategy. a resource refers to a companys most strategically important asset, whereas a capability refers to the basis of a companys competitive advantage over rivals. a resource is a competitively relevant internal activity that a firm performs especially well relative to other internal activities, whereas a capability is a competitively important activity performed by key strategic allies. 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 companys resources. a resource usually resides in a companys 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 companys human capital, information capital, or organizational capital.