Customer Responsiveness is determined by customization of products, quick delivery time, quality, design and prompt after sales service. For ex : The popularity of courier service over Indian postal service is due to the fastness of service. DISTINCTIVE COMPETENCIES Distinctive competence is a unique strength that allows a company to achieve superior efficiency, quality, innovation and customer responsiveness. It allows the firm to charge premium price and achieve low costs compared to rivals, which results in a profit rate above the industry average. Ex : Toyota with world class manufacturing process. In order to call anything a distinctive competency it should satisfy 3 conditions, namely: • Value – disproportionate contribution to customer perceived value; • Unique – unique compared to competitors; 44
• Extendibility – capable of developing new products. Distinctive Competencies are built around all functional areas, namely: • Technology related • Manufacturing related • Distribution related • Marketing related • Skills related • Organizational capability • Other types. Distinctive Competencies arise from two sources namely, Resources – A resource in an asset, competency, process, skill or knowledge. Resources may be tangible – land, buildings, P&M or intangible – brand names, reputation, patens, know-how and R&D. A resource is a strength which the co with competitive advantage and it has the potential to do well compared to its competitors. Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. The following are some examples of such resources: • Patents and trademarks • Proprietary know-how • Installed customer base • Reputation of the firm • Brand equity. The strengths and weaknesses of resources can be measured by, • Company’s past performance • Company’s key competitors and • Industry as a whole. The extent to which it is different from that of the competitors, it is considered as a strategic asset. Evaluation of key resources A unique resource is one which is not found in any other company. A resource is considered to be valuable if it helps to create strong demand for the product. Barney has evolved VRIO framework of analysis to evaluate the firm’s key resource, say 45
• Value – does it provide competitive advantage? • Rareness – do other competitors possess it? • Imitability – is it costly for others to imitate? • Organization – does the firm exploit the resource? Capabilities – are skills, which bring together resource and put them to purposeful use. The organizations structure and control system gives rise to capabilities which are intangible. A company should have both unique valuable resources and capabilities to exploit resources and a unique capability to manage common resources.
- Fall '16
- Mr das