Core Competency & Competitive Advantage Ali Sadhik Shaik [email_address] sadhiqali.blogspot.com

Agenda Core Competency -- Roots Of Competitive Advantage -- Developing Strategic Architecture -- Identification Of Core Competency. Competitive Advantage

Core Competency

-- Roots Of Competitive Advantage

-- Developing Strategic Architecture

-- Identification Of Core Competency.

Competitive Advantage

Core Competence of the Corporation

Core competency… Critical task Of management- Creating products of customer needs but not yet imagined Harmonizing streams of technology and delivery of values Collective learning in the Organization Competency = innovative minds + Skill full expertise hands = New Product

Critical task Of management- Creating products of customer needs but not yet imagined

Harmonizing streams of technology and delivery of values

Collective learning in the Organization

Competency = innovative minds

+

Skill full expertise hands = New Product

Roots Of Competitive Advantage Consolidate corporate wide tech. & production skills Binds the existing business & a engine of new business development Involvement & a deep commitment to work across organizational boundaries

Consolidate corporate wide tech. & production skills

Binds the existing business & a engine of new business development

Involvement & a deep commitment to work across organizational boundaries

Developing Strategic Architecture A road map of the future Consistency in resource allocation & development of appropriate administrative infrastructure Cannot be copied by competitors

A road map of the future

Consistency in resource allocation & development of appropriate administrative infrastructure

Cannot be copied by competitors

Identification Of Core Competency Potential access to wide variety of market Contribute to the perceived customer benefits Should be difficult to imitate

Potential access to wide variety of market

Contribute to the perceived customer benefits

Should be difficult to imitate

Conclusion "Capabilities are considered core if they differentiate a company strategically." “ A core competency differentiates not only between firms but also inside a firm it differentiates amongst several competencies. In other words, a core competency guides a firm recombining its competencies in response to demands from the environment."

"Capabilities are considered core if they differentiate a company strategically."

“ A core competency differentiates not only between firms but also inside a firm it differentiates amongst several competencies. In other words, a core competency guides a firm recombining its competencies in response to demands from the environment."

Looking inside for Competitive Advantage

Internal Blanks of SWOT The Question of Valve The Question of Rareness The Question of Imitability The Question of Organization

The Question of Valve

The Question of Rareness

The Question of Imitability

The Question of Organization

The Question of Valve Understand firm’s resources and capabilities in adding value Constant evaluation in changing competitive environment Ex: Sony, 3M. Resources and Capabilities differ from company to company Ex: Rolex and Timex

Understand firm’s resources and capabilities in adding value

Constant evaluation in changing competitive environment

Ex: Sony, 3M.

Resources and Capabilities differ from company to company

Ex: Rolex and Timex

The Question of Rareness Firm’s unique internal attributes “ How many competing firms already posses these valuable resources and capabilities?” Ex: Domino’s and Pizza Hut DELL and HP

Firm’s unique internal attributes

“ How many competing firms already posses these valuable resources and capabilities?”

Ex: Domino’s and Pizza Hut

DELL and HP

The Question of Imitability Duplication and Substitution The importance of history Ex: Caterpillar and Komatsu The importance of small decisions Ex: Mail box Inc The importance of socially complex resources. Ex: Sony, HP

Duplication and Substitution

The importance of history

Ex: Caterpillar and Komatsu

The importance of small decisions

Ex: Mail box Inc

The importance of socially complex resources.

Ex: Sony, HP

The Question of Organization Complementary resources of org. “ Is a firm organized to exploit the full competitive potential of its resources and capabilities?” Limited ability to generate competitive advantage.

Complementary resources of org.

“ Is a firm organized to exploit the full competitive potential of its resources and capabilities?”

Limited ability to generate competitive advantage.

Related case Competitive implications of the “Cold Wars” Competitive Position of the Macintosh Computer

Competitive implications of the “Cold Wars”

Competitive Position of the Macintosh Computer

Conclusion “ If you don't have a competitive advantage, don't compete.” -- Jack Welch “ The ability to learn faster than your competitors may be only sustainable competitive advantage.” --Arie De Geus

“ If you don't have a competitive advantage, don't compete.”

-- Jack Welch

“ The ability to learn faster than your competitors may be only sustainable competitive advantage.”

--Arie De Geus