How can our
company determine its core competencies?
Core
competencies differentiate an organization from its competition and create a
company's competitive advantage in the marketplace. Typically, a core
competency refers to a company's set of skills or experience in some activity,
rather than physical or financial assets. An organizational core competency is
an organization's strategic strength. Honda's strategic strength, for example,
lies in its engine and propulsion systems. Sony has a core competency in
miniaturization. Federal Express has a core competency in logistics and
customer service.
Three
tests can be applied to determine a core competency:
• A core competency can
lead to the development of new products and services and must provide potential
access to a wide variety of markets.
• It must make a
significant contribution to the perceived benefits of the end product.
• It should be difficult
for competitors to imitate. In many industries, such competencies are likely to
be unique.
Identifying
and developing company's core competencies contribute to sustaining the company's
long-term competitive advantage.
In
determining the company's core competencies, identify the underlying skill,
ability, knowledge, experience, technology or process that enables the company
to provide its unique set of products or services. Determine how can use the
company's core competencies to develop strategic responsiveness to gain
competitive advantage. High-performing companies develop new core competencies
and expand their existing ones to enter new and future markets. A company at
this level of functioning recognizes the needs and wants of customers in new
and future markets and develops the competencies necessary to meet those needs
and wants.
Company leadership should
be aware that even the most successful strategy will eventually fail unless it
is continually monitored and refreshed to meet changing market conditions.
A company's core competency is the trunk of the tree, while its products are the branches.
ReplyDeleteNice thought. its so interesting with a great idea.
DeleteCore competencies of a company is it's strategic strengths. Core competencies contributes to sustaining the long term competitive advantage of the company.
ReplyDeleteCore competencies are what make it difficult for other businesses to duplicate a product or service, and then outperform the competition. Nice article.
ReplyDeleteAccording to the Harvard Business Journal, Wal-Mart's core competencies are buying power, supply chain management and logistical superiority. These core competencies allow Wal-Mart to sell their goods at lower prices than many of their competitors. Identifying the core competencies as HR professional is a challenging task.
ReplyDeleteIn determining your company's core competencies, identify the underlying skill, ability, knowledge, experience, technology or process that enables your company to provide its unique set of products or services.
ReplyDeleteBusinesses can develop core competencies by identifying their key internal strengths and investing in the capabilities valued by their customers. Quality and Reliability, Exceptional Customer Service, Being Competitive can be some of their major competencies in my opinion.
ReplyDeleteCore competencies are the key element of an organisation. It reflects strength and capability of an organisation which help to regain its long term policies and regulations.
ReplyDeleteCore competencies help in bridging the gap between performance and opportunities.
ReplyDeleteNice thought & prospective article
ReplyDelete