Brand Building & Development Capability

brand development and multi-channel integration capabilities.

2.2.2.1 Absorptive capacity

Absorptive capacity is considered one of the first capabilities that constitute dynamic capabilities (Eisenhardt & Martin, 2000; Zahra & George, 2002; Wang & Ahmed, 2007; Banjongprasert, 2013; Rehman & Saeed, 2015). Absorptive capacity refers to the ability and manner in which an organization can absorb and utilize information, knowledge and resources from outside. Studies have provided definitions of absorptive capacity, specifically: Cohen & Levinthal (1990) consider absorptive capacity as “the ability of a firm to determine the value of knowledge, assimilate knowledge and apply knowledge from outside to achieve the goals of the firm”. Sharing the same view, Zahra & George (2002) consider absorptive capacity as “a set of strategic organizational habits and processes through which the organization can acquire, assimilate, transform and apply knowledge with the aim of creating capabilities for the organization”. It can be said that the absorptive capacity perspective of Cohen & Levinthal (1990); Zahra & George (2002) is considered an important premise for later authors to inherit and develop the theory of absorptive capacity. Later authors Lane & colleagues (2006), Tu & colleagues (2006), Todorova & Durisin (2007), Camisón & Forés (2010), Banjongpraset (2013), Nguyen Phuc Nguyen (2016) also acknowledged that absorptive capacity is a form of orientation of the organization's ability to learn from external resources and knowledge to help the business develop and achieve its set goals. In particular, Camisón & Forés (2010) in their study acknowledged that absorptive capacity is a group of dynamic capacity components, which is expressed through efforts to identify, acquire, and assimilate new knowledge from the outside; and convert and apply that knowledge with current internal knowledge to create new capabilities for the business.

From the above analysis, the thesis gives the following definition and approach to absorptive capacity: "Absorptive capacity is the capacity of an enterprise, allowing the enterprise to acquire (receive), assimilate knowledge from outside, convert them into new knowledge suitable to the current conditions of the enterprise and use this knowledge to adapt to changes in the external environment and achieve the enterprise's defined goals" .

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From the concept pointed out, the absorptive capacity in this study has some characteristics as follows:

(1)- Absorptive capacity helps businesses identify, access, and effectively adapt new knowledge from outside and transform it into the business's own knowledge (Cohen & Levinthal, 1990).

(2)- Absorptive capacity is obtained through the learning process of the enterprise (Lane & colleagues, 2006). The process of learning external knowledge sources goes through three stages: identifying and understanding external knowledge; assimilating external knowledge through knowledge transformation; and using new knowledge to create new knowledge of the enterprise through learning how to exploit knowledge. (3)- Absorptive capacity is a component of dynamic capacity. Absorptive capacity helps enterprises to select and identify external information sources in order to acquire and absorb new knowledge that is valuable and suitable for the enterprise. Each enterprise will have its own way of assimilating, transforming and adapting to different and unique knowledge based on the capabilities and goals of each enterprise. The conversion of received and assimilated knowledge into the enterprise's own knowledge, helping the enterprise to optimally exploit this knowledge and achieve the enterprise's goals is a factor that competitors can hardly copy and adapt. The way enterprises absorb new knowledge and convert and use it into their own knowledge, helping to achieve better competitiveness and better adaptation to changes from the external environment is a factor that not all competitors can easily adapt, copy or create an equivalent ability that can replace and compete; therefore, absorptive capacity is irreplaceable.

Thus, absorptive capacity meets the requirements of the VRIN standard, so absorptive capacity is considered a component of dynamic capacity.

Studies have shown that absorptive capacity is made up of four components: knowledge acquisition capacity; knowledge assimilation capacity; knowledge transformation capacity; and knowledge application capacity (Cohen & Levinthal, 1990; Zahra & George, 2002; Lane et al., 2006; Todorova & Durisin, 2007; Camisón & Forés, 2010; Davila et al., 2019).

Knowledge acquisition capability (knowledge acquisition) reflects how a firm identifies new knowledge from outside, values it, and acquires it (Zahra & George, 2002; Liao et al., 2003 cited in Camisón & Forés, 2010). Knowledge acquisition capability is influenced by the intensity, speed, and orientation of knowledge identification. The intensity and speed of a firm’s knowledge identification and aggregation can determine how well a firm acquires knowledge; while the orientation of knowledge accumulation can also strongly influence knowledge acquisition capability (Zahra & George, 2002).

Knowledge assimilation capability is the ability of a firm to absorb knowledge from outside (Szulanski, 1996 cited in Eisenhardt & Martin, 2000). Content

The importance of knowledge assimilation capacity is that enterprises need to establish a system of activities and processes to be able to process, analyze, interpret, understand and classify new knowledge as well as internalize them as a premise for converting and using this knowledge.

Knowledge transformation capability refers to the ability of a business to improve and develop internal processes and activities to easily combine existing knowledge with new knowledge that has been acquired and assimilated by the business (Camisón & Forés, 2010). To achieve efficiency and success in knowledge transformation, businesses need to focus on adding or eliminating outdated knowledge or knowledge that is not suitable for the current conditions and current goals of the business. In addition, businesses need to be able to explain and combine existing knowledge with newly acquired and assimilated knowledge in a more creative and different way.

Knowledge application and exploitation capabilities are related to how a firm selects, extends, and utilizes new knowledge that has been transformed into its current operations to create new capabilities (Zahra & George, 2002; Lane et al., 2006). Knowledge application and exploitation in each firm may differ based on the orientation and goals of each firm. To exploit knowledge effectively, the way knowledge is created and assimilated needs to be appropriate to the current situation of that firm.

2.2.2.2 Innovation capacity

Innovation capability is defined by Crossan & Apaydin (2010) as “the ability of a firm to create, adopt and use something new that adds value in the economic and social sphere; the ability to renew and expand products, services and business markets; the ability to develop new production methods; and the ability to establish new management systems”. Terziovski (2010) believes that innovation capability “is the technical, design, production, management and commercial activities that are related to the marketing of a new (or improved) product or to the first application of commercial activities to a new (or improved) process or equipment”. Thus, it can be seen that innovation capability is related to improving and/or creating new things for the firm and has the ability to improve the firm's business performance in the market (Crossan & Apaydin, 2010). In the context of service businesses, innovation capability is viewed as the ability to optimally utilize a firm's resources to create, innovate and improve business processes and service products (Wang & Ahmed, 2004; Grawe et al., 2009; Hilmi et al., 2010).

Based on the above viewpoints, the research object is enterprises in

In the retail industry, the thesis inherits the viewpoint on innovation capacity proposed by Wang & Ahmed (2004), Grawe et al. (2009), Terziovski (2010). Accordingly, innovation capacity is defined as follows: “Innovation capacity is the ability to renew, improve, create and recreate new activities, processes, and products to adapt to environmental changes and internal change requirements of the enterprise. Innovation capacity is implemented based on innovation of business processes and innovation of supply services”.

Thus, the innovation capacity approached in the thesis has the following characteristics:

Firstly, innovation capability is the ability to help businesses change, improve or create new things for businesses, helping to adapt to changes in the environment. Regardless of whether the change can come from business products and services or from within the business, as long as the innovation helps businesses respond effectively to the external environment, it will be considered a component of innovation capability (Terziovski, 2010).

Second, in relation to the service enterprise object, innovation capacity can be grouped into two groups: One is the group of innovation capacity of the enterprise's business processes; including the ability to change and improve business processes, business management methods and methods of resolving conflicts within the enterprise. The second is the group of innovation capacity of service provision; including changing, improving and creating new methods and types of service provision, helping to best meet the needs and bring added value to customers (Wang & Ahmed, 2004; Hilmi et al., 2010).

Regarding the role of innovation capacity, Nguyen Dinh Tho & Nguyen Thi Mai Trang (2009) believe that innovation capacity is a means to change businesses, helping to achieve improvements and inventions for businesses; businesses with innovation capacity can gain competitive advantages in the market and increase business results. Nguyen Tran Sy (2013) in his research pointed out that innovation capacity can be improved through renewing business activities to take advantage of external opportunities and help businesses form dynamic capacity; therefore, innovation capacity is considered a dynamic capacity component. Nguyen Phuc Nguyen (2016) considers innovation as an important resource in creating competitive advantages for businesses. Innovation capacity helps businesses create new values through product innovation; market innovation; process innovation and behavioral innovation. Tidd & Bessant (2009) (cited in

Davila et al., 2019) concluded that innovation capacity is a component of dynamic capacity. Parashar & Singh (2005) (cited in Williamson, 2016) also affirmed that innovation capacity is built on the foundation of dynamic capacity development and helps to form and develop the dynamic capacity of the organization. Innovation capacity is a specific and distinct capacity of the enterprise, helping to form the dynamic capacity of the enterprise (Nguyen Phuc Nguyen, 2016). Innovation capacity is considered a means to change the enterprise, helping the enterprise achieve new things or new ideas, thereby creating competitive advantages and increasing the business results of the enterprise (Nguyen Dinh Tho & Nguyen Thi Mai Trang, 2009; Nguyen Tran Sy, 2013). Through the creation of new ideas or products and services, innovation capacity can help businesses respond to changes from within the business as well as from the external environment. This shows that innovation capacity satisfies all the conditions of VRIN's valuable, rare, difficult to imitate and irreplaceable standards, so innovation capacity is considered an important component of dynamic capacity. Nguyen Phuc Nguyen (2016) also stated that businesses need to focus on investing in R&D to be able to create and develop innovation capacity. Innovation capacity based on the learning orientation and new value creation of each organization has its own characteristics, not easily replaced and imitated. Therefore, innovation capacity is considered a component of dynamic capacity in businesses (Nguyen Phuc Nguyen, 2016).

Eisenhardt & Martin (2000) pointed out that product innovation allows enterprises to renew and reformat their resources. Meanwhile, renewing and reformat their resources is one of the main contents of dynamic capabilities (Teece & al., 1997). Therefore, innovation capabilities affect the creation and nurturing of dynamic capabilities of enterprises. Enterprises with higher innovation capabilities than their competitors will perform better, have higher profits, larger market values, higher credit ratings and higher survival potential (Volberda & al., 2010 cited in Davila & al., 2019). Innovation capabilities both determine the business performance of enterprises and create and maintain sustainable competitive advantages for those enterprises (Crossan & Apaydin, 2010). In addition, research by Wang & Ahmed (2004) also shows that innovation capacity plays an important role in helping enterprises innovate production and product supply methods, innovate processes and business management methods, thereby significantly improving production processes and efficiency as well as business management efficiency. An enterprise with good innovation capacity can improve its operating performance.

thereby helping businesses reduce production costs, operating costs and business operations, improve and apply new delivery methods, improve the quality of products and services provided; thereby helping to expand market share, achieve outstanding performance as well as create and maintain competitive advantages for businesses (O'Sullivan & Dooley, 2009). Therefore, innovation capacity is one of the important factors creating dynamic capabilities to thereby increase the competitive advantage of businesses.

The innovation capacity approached in the thesis is reflected by two groups of capacities, which are "Innovation capacity of business operation process" and "Innovation capacity of service supply".

Business process innovation capability is considered as a method to restructure and reshape the organizational activities within the enterprise (Hilmi et al., 2010). Activities related to changing and improving technical technologies, research and development activities, innovating and improving management and operation methods, or general methods to create the premise for creating and applying new supply services are considered the contents of business process innovation capability.

Service innovation capability is understood as the ability of a business to create valuable changes to the services it provides to customers (O'Sullivan & Dooley, 2009). Victorino et al. (2005) pointed out that the need for service innovation in service businesses comes from the increasingly higher demands from customers for the quality and price of the service provided. If product innovation is demonstrated through changing, improving or renewing products through design and production, product innovation in service businesses in general and retail businesses in particular focuses on finding new ideas to effectively improve service provision (Grawe et al., 2009). Therefore, the product innovation capacity of service businesses will be concerned with applying new techniques and offering features, and creating customized products and services suitable for each specific customer segment.

2.2.2.3 Brand building & development capacity

According to Aaker (1996), a brand is understood as "a name and/or a symbol (logo, brand symbol or packaging design) through which the goods and services of one enterprise can be identified and distinguished from those of another enterprise to create a difference between the products and services compared to

competitors”. This author also believes that a brand is considered a sign of recognition for customers to distinguish products from competitors and is also a way to protect both customers and manufacturers from imitation by competitors. A brand is considered a way for consumers to recognize specific products and services in a set of similar products and services. A successful brand must be able to bring added values that buyers or users can feel, consume and recognize as unique, not found in other competitors.

To have a good brand, businesses need to create, nurture and effectively exploit brand building and development capabilities. According to O'Cass & Ngo (2011), brand building and development capabilities are understood as "the ability of a business to arrange a group of related activities to implement marketing programs and communication activities to convey the meaning of the brand to customers". In terms of business performance, Ewing & Napoli (2005) said that "Brand building and development capabilities include a series of business operations to create and maintain common perceptions of brand meaning, helping to bring superior value to stakeholders and superior business performance to the business". This perspective refers to the creation of attitudes, feelings and perceptions towards the brand of customers and of all parties related to the business from both internal and external environments. From this concept, Ewing & Napoli (2005) also pointed out the importance of researching and recognizing the needs of stakeholders to jointly create and develop appropriate brands, contributing to bringing more added value. Ni & Wan (2008) argued that brand building and development capacity can be understood in different directions, based on the approach from activities related to the internal business (including capabilities related to assets and knowledge) and the approach from the external orientation (including market factors and macro-institutional factors). Accordingly, brand building and development capacity is related to a "dynamic" process of creating and developing brand values, meaning that this process of creation and development must be flexible to adapt to market conditions. From the analyzed perspectives and definitions, it can be seen that the capacity to build and develop a brand needs to be approached on the basis of creating and developing the brand values of the enterprise and bringing benefits and added value to customers and stakeholders of the enterprise. To build a good brand, the capacity to build and develop a brand needs to be co-nourished and developed by both the enterprise and its stakeholders. From

From that perspective, the thesis would like to introduce the concept of brand building and development capacity inherited and synthesized from the perspectives of Ewing & Napoli (2005), Ni & Wan (2008), which means "Brand building and development capacity is the ability to create, nurture and communicate brand values based on internal resources and external conditions, bringing outstanding value to customers and stakeholders of the enterprise and contributing to improving the business performance of the enterprise" .

In a changing competitive environment, the focus on building and developing a brand needs to be implemented throughout all stages of a company's operations and business, with special attention paid to activities in contact with customers and business partners (Brodie & Associates, 2017). Merrilees & Associates (2011) also argued that the ability to build and develop a brand helps to better define the meaning of a simple brand; use that brand as an operational tool; have the ability to better communicate the brand meaning consistently and can be supported and co-participated by employees in the process of building and developing that brand. Keller (2000) (cited in Wong & Merrilees, 2005) asserted that a strong brand is one in which the product is always at the forefront of the industry and has the ability to flexibly adapt to external environmental conditions. Combining brand building and development capabilities to adapt to environmental changes helps businesses achieve the desired brand performance benefits (Tsai, 2015). Brand building and development capabilities are considered the most valuable assets that a DNBL needs to own and nurture (Frasquet & colleagues, 2018). At the same time, brand building and development helps businesses create and maintain attitudes, feelings and common perceptions of brand meaning, thereby contributing to bringing superior value to customers and stakeholders (Ewing & Napoli, 2005). With such meaning, brand building and development capabilities are considered valuable to businesses. Brands are considered a sign of recognition and a unique characteristic of each business, helping to distinguish and differentiate one business from another (Aaker, 1996). Therefore, building and developing a unique, recognizable and well-received brand is one of the important factors that contribute to the success of a business. Successful brand development helps businesses create uniqueness in the market and is difficult for competitors to imitate, while easily controlling risks and adapting better to environmental conditions (Lei & colleagues, 2013). Each business will have different ways and directions for building and developing a brand that competitors cannot easily imitate and copy. As

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