Decision makers in companies face a fundamental challenge: how to identify which capabilities to develop and which ones are no longer important in order to gain and sustain a competitive advantage. Two of these are technological and marketing capabilities.

Until now research has neglected the synergies between these complementary capabilities and this article proposes a new approach that identifies the core capabilities, explores their inter-relationships and provides guidance for a dynamic technological and marketing strategy. The methodology is explored for the case of Gorenje, a European manufacturer of household appliances where two strategically important ‘integrators’ are industrial design as a technological capability and product development as a marketing capability.

The analysis shows that firms in mature sectors can continue with niche marketing strategies if they are supported by continuous incremental innovations. Key to the successful implementation of this strategy is the development of complementary capabilities that enable management to recognise emerging customer desires and translate them quickly into product ideas.

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