Competitors Have Low Absorptive Capacity

Competitors Have Low Absorptive Capacity. Taken together, factors such as existing strategic commitments and low absorptive capacity limit the ability of established competitors to imitate the competitive advantage of a rival. Absorptive capacity refers to the ability of an enterprise to identify, value, assimilate, and use new knowledge.

The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. Absorptive capacity has been marked as one of the most important capabilities of Multinational Corporations for effective management of knowledge. Absorptive capacity and a failed cross-border M&A.

Absorptive capacity is widely defined as "the ability to recognize the value of new, external information, assimilate it and apply it to commercial ends' (Cohen and Levinthal.

It prevents firms from getting locked out of new markets.

Absorptive capacity is linked to a set of organizational routines and strategic processes through which their firms acquire, assimilate, transform, and Capability to outsmart (or outspend) the competition; capability to put the Business Model Canvas to some good use; capability for new product or service. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. The present study develops and validates a multidimensional measure of ACAP.