Building Competencies, Capabilities and Resource Strengths

You may recall the following definitions from an earlier Module:
• Core Competency – An internal, value-creating activity that is central to the company’s ability to achieve a competitive advantage.
• Distinctive Competency – An internal, value-creating activity that is unique and allows a company to achieve a competitive advantage.
• Capability – A company’s ability to put its resources and competencies to productive use.
Core competencies are rarely reliant on a single department – they are more likely to owe their existence to a strong collaboration between two or more departments. Strategically relevant competencies might include:
• Greater proficiency in product development
• Better manufacturing know-how
• Better after-sales service
• Faster response to changing customer needs
• Capacity to speed new products to market
• Superior inventory management systems
• Better marketing and merchandising skills
• Greater effectiveness in promoting staff-management co-operation
Greater proficiency in product development and/or capacity to speed products to market may be the foundation for strategy based on superior innovation. Better after-sales service and/or faster response to customer needs may give rise to a strategy based on superior customer responsiveness. Better manufacturing know-how may yield superior efficiency or superior quality.
The key to building a competency into a competitive advantage is to concentrate more effort and talent on it than your competitors. Sustaining that advantage means adapting competencies to new conditions. In considering the building of competencies the following questions could be asked:
• What new core competencies do we need to compete now?
• What new core competencies do we need to compete in the future?
• Can we improve our use of existing core competencies?
• What new products or services can we develop by using existing core competencies?
Capabilities that are drawn from internal collaboration and are