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Primary Sources of Distinctive Capabilities |
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Surprise To Win:
3 Strategies
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Differentiation
Strategies
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Market structure
that limits entry
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Rich experience which by its very
nature requires extended time to replicate
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Tacitness in
knowledge and relationships
– practices, routines and behavior which cannot be replicated
because no-one fully comprehend their nature
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Distinctive
and Reproducible Capabilities
The opportunity for your company to
sustain your
competitive advantage is determined by
your capabilities of two kinds – distinctive capabilities and
reproducible capabilities – and their unique combination you create
to achieve
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synergy.
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Your distinctive
capabilities – the characteristics of your company which cannot be
replicated by competitors, or can only be replicated with great
difficulty – are the basis of your
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sustainable competitive advantage.
According to the
resource-based view
of the company, sustainable competitive advantage is achieved by
continuously developing existing and creating new resources and
capabilities in response to rapidly changing market conditions.
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Distinctive capabilities can be of many kinds:
patents,
exclusive
licenses,
strong brands,
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effective leadership,
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teamwork,
or tacit knowledge.
Reproducible capabilities are those that
can be bought or created by your competitors and thus by themselves
cannot be a source of competitive advantage. Many technical,
financial and marketing capabilities are of this kind. Your
distinctive capabilities need to be supported by an appropriate set
of complementary reproducible capabilities to enable your company to
sell its distinctive capabilities in the market it operates.
Radical
Innovation
Long-term corporate success is linked
to the ability to innovate. Although corporate investment in
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improvements
to existing products and processes does bring
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growth, it is new game
changing breakthroughs that will launch company into new markets, enable
rapid growth, and create
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high return on investment. Companies that are not bound by prevalent
fallacies and rules of conventional wisdom have been able to break out of
the pack, create a new highly profitable market niche, and
win customers.
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Blue Ocean
vs. Red Ocean Strategy
Radical innovation should be a continued
activity to help your company reinvent itself and maintain its
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market leadership...
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Build Synergies
A corporation that builds on
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core competencies
utilizes skills that combine to strengthen
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value chains and build greater competitive advantages. This leads to
synergies among
business units,
whereby they become more productive together than independently.
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Trust as a Distinctive Capability
Trust-based working relationships are an important
source of your
sustainable competitive advantage because trust is
valuable, rare, imperfectly imitable, and often nonsubstitutable...
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