concept of strategic and competitve advantage

concept of strategic and competitve advantage -...

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Unformatted text preview: Competencies, Core Competencies, Distinctive Competencies and Competitive Capabilities _ 4 • Competencies: Something an organization is good at doing. Almost always the product of experience. representing an accumulation of learning and the buildup of proficiency in performing an internal activity. o Ex. just-in-time inventory control or designing an unusually appealing and user-friendly website • Core Competence: A proficiently performed internal activity that is central to a company's strategy and competitiveness. Often knowledge-based, residing in people and in a company's intellectual capital and not in its assets on the balance sheet. o Ex. Ben & Jerry's core competence is creating unusual flavors of ice cream with catchy names • Distinctive Competencies: A competitively valuable activity that a company performs better than its rivals. Signifies greater proficiency than a core competence and thus represents a competitively superior resource strength o Ex. Toyota has a distinctive competence in low-cost, high-quality manufacturing of motor vehicles and its pushing the boundaries of its production advantage with a new type of assembly line What Are the Company's Resource Strengths and Weaknesses and Its External Opportunities and Threats- 1 • SWOT Analysis: Provides an overview of whether the company's overall situation is fundamentally healthy or unhealthy. Powerful tool for sizing up a company's resource capabilities and deficiencies. its market opportunities, and the external threats to its future well-being o Potential resource strengths: a powerful strategy, a product that is strongly differentiated from those of rivals, competencies and capabilities that are well matched to industry key success factors o Potential resource weaknesses: no clear strategic direction, resources that are not well matched to industry key success factors, no well developed or proven core competencies • External Threats: External environment poses threats to its profitability and competitive well-being. Threats can stem from the emergence of cheaper or better technologies, rivals introduce new or improved products, potential of a hostile takeover, etc.. • SWOT Listings Reveal: Payoff comes from the conclusions about a company's situation and the implications for strategy improvements that flow from the lists The Key Questions in Analyzing a Company's Resources and Competitive Position _ 1 I. Is the resource strength hard to copy? 2. Is the resource strength durable - does it have staying power? 3. Is the resource really competitively superior? 4. Can the resource strength be trumped by the different resource strengths and competitive capabilities of rivals?...
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