Sustainable Competitive Advantage:

Corporate Capabilities

Core Competencies

Things You Can Do Better Than Your Competition

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

 

"Do what nobody else can do for you. Omit to do anything else." ~ Henry David Thoreau

 

Sustainable Competitive Advantage Corporate Capabilities Core Competencies Customer Value Creation Sustainable Competitive Advantage Resource-based View of Firms

Define Your Core Competences

Three Main Characteristics

  1. They should make a disproportional contribution to stakeholder value

  2. They should open doors to other opportunities

  3. They should represent such a unique blend of tacit and explicit knowledge that it cannot be copied by competitors

What Does the Core Competence Achieve?

  1. Enables the creation of new products and services that provide potential access to a wide variety of markets.

  2. Makes a significant contribution to the customer value and enables a business to deliver a fundamental customer benefit the perceived customer benefits of the end product.

  3. Helps create sustainable competitive advantage as it is competitively unique and difficult for competitors to imitate.

 

 

Extended Enterprise Core Competencies Virtual Integration Strategic Alliances Outsourcing Customer Partnership

 

What: is Core Competence?

"A core competency is an area of specialized expertise that is the result of harmonizing complex streams of technology and work activity." ~ C.K.Prahalad

Core competencies are the most significant value creating skills within your corporation and key areas of expertise which are distinctive to your company and critical to the company's long term growth.

Your company's core competencies are the things that you can do better than your competitors in the critical, central areas of your company where the most value is added to your products. These areas of expertise may be in any area from product development to employee dedication.

A competence which is central to your business's operations but which is not exceptional in some way should not be considered as a core competence, as it will not generate a differentiated advantage over rival businesses. It follows from the concept of Core Competencies that resources that are standardized or easily available will not enable a business to achieve a competitive advantage over rivals.4

Core Competence vs. Sustainable Competitive Advantage

If a core competence yields a long term advantage to the company, it is said to be a Sustainable Competitive Advantage.

10 Commandments of Innovation

 

Core Competence as a Team Sport

A core competence is a combination of complementary skills and knowledge bases embedded in a group or team that taken together makes it possible to provide a superior product.

7 Dimensions of Strategic Innovation

The Strategic Innovation framework weaves together seven dimensions to produce a range of outcomes that drive growth.

Core Technologies and Competencies is the set of internal capabilities, organizational competencies and assets that could potentially be leveraged to deliver value to customers, including technologies, intellectual property, brand equity and strategic relationships... More

Building Synergies

A corporation that builds on core competencies utilizes skills that combine to strengthen value chains and build greater competitive advantages. This leads to synergies among business units, whereby they become more productive together than independently.3

 Case in Point  Black and Decker

Black and Decker's core technological competency is in 200 to 600 W electric motors. All of their products are modifications of this basic technology (with the exception of their work benches, flash lights, battery charging systems, toaster ovens, and coffee percolators).

They produce products for three markets2:

  1. the home workshop market in the home workshop market, small electric motors are used to produce drills, circular saws, sanders, routers, rotary tools, polishers, and drivers.

  2. the home cleaning and maintenance market in the home cleaning and maintenance market, small electric motors are used to produce dust busters, etc.

  3. kitchen appliance market in the kitchen appliance market, small electric motors are used to produce can openers, food processors, blenders, bread makers, and fans.

13 Tips for Transitioning Your Company To a Lean Enterprise

  • Build on your company's roots to develop your own way... More

 

 Discover much more in the

FULL VERSION of e-Coach

Individual Competencies vs. Core Competencies...

Two Basic Ways to Compete and Prosper in Any Market...

Three Common Traits of Marketplace Champions...

Distinctive Corporate Capabilities...

The Framework for a Growth Strategy: Four Rules...

7 Dimensions of Strategic Innovation...

Building on Your Core Competencies and Accessing Missing Ones...

Virtual Integration as a Source of Competitive Advantage...

Outsourcing Strategies...

 Case in Point  General Electric (GE)...

 Case in Point  Microsoft's Concept of Network Externality...

 Case in Point  Saga...

 Case in Point  Tesco...

 Case in Point  Fun4Biz...

 Case in Point  Innovatel...

 Case in Point  Innoved...

 

 

References:

  1. "The Core Competence of the Corporation," C.K.Prahalad and G.Hammel

  2. "Core Competence," Wikipedia

  3. "Strategic Management", Alex Miller

  4. "Core Competencies", tutor2u.com

  5. "Every Business Is a Growth Business," Ram Charan and Noel M. Trichy

  6. Sustainable Competitive Advantage, Vadim Kotelnikov