Strategic fit

Strategic fit is the degree to which an organization's resources and capabilities align with its strategy and with opportunities in the external environment. Resources are assets and inputs to production, controlled by the company, and capabilities describe what the company can do with those resources. If the company's resources and capabilities are closely aligned with its strategy, the strategy is more likely to succeed.

Strategic fit can be used to evaluate the current strategic position of a company, as well as opportunities such as mergers and acquisitions and divestitures of organizational divisions. Strategic fit is related to the resource-based view of the firm which suggests that valuable, rare and hard-to-imitate resources and capabilities can create a competitive advantage.