Professional Documents
Culture Documents
position
How well is the company's present strategy working?
It is very important to study the company's competitive
approach to understand the working of the company's present
strategy.
We need to study
if the company is striving to be low-cost leader or stressing to
differentiate its products.
is it concentrating on serving a broad spectrum of customers or a
narrow niche market.
what is its geographical coverage.
is it operational in just a single stage of industry's
production/distribution system or is vertically integrated across
several stages.
the latest moves to improve competitive position and performance.
what are the functional strategies in R&D, production and other
departments.
Competence
A competence is something an organization is good at
doing.
It is nearly always the product of experience.
It originates with deliberate efforts to develop the
organizational ability to do something.
It is about selecting people with the requisite knowledge
and skills, upgrading individual abilities as needed and
molding the efforts and work products of individuals into
a cooperative group effort to create organizational
ability.
As expertise builds and company gains proficiency in
performing the activity consistently well at an
acceptable cost the ability evolves into a true
competence and company capability. e.g. proficiency in
specific knowledge, selecting good locations for retail
outlets, merchandising and product display
Core competence
A core competence is a proficiently performed internal
activity that is central to a company's strategy and
competitiveness.
It is more valuable than a competence because of its role
in the company's strategy and its contribution to making
the company success.
It can relate to any of the several aspects of a company's
business.
A company may have more than one core competence,
but it is difficult to have more than two or three. E.g. ITC
has core competence in distribution and customization of
taste
It is usually knowledge based, residing in people and is a
company intellectual capital.
Generally it is also an cross-departmental combinations of
knowledge and expertise.
Distinctive competence
A distinctive competence is a competitively valuable
activity that a company performs better than its rivals.
E.g. search engine of Google, product design of Apple
It is a competitively superior strength.
A competency translates into a distinctive competence
when the company enjoys competitive superiority when
performing that activity.
A core competence becomes real competitive advantage
only when it rises to the level of a distinctive competence.
e.g. Sharp corporation in LCDs, Toyota in low-cost, high
quality manufacturing and short design-to-market cycles
for new models