Distinguishing Core Competence Essay

285 WordsMar 4, 20122 Pages
Distinguishing core competences from general competences: General competences are attributes such as skills, knowledge and technology that are common among competitors e.g. all pharmaceutical companies possess similar competences (basic abilities) in research and development. They do not produce superior performance but are essential for survival. General competences are very similar to 'key factors for success' as they are shared by all organisations in a particular industry Core competences are distinguished from general competences in several ways: They are based upon one or more of the following: • they are only possessed by those companies whose performance is superior to the industry average • they are unique to the company • they are more complex • they are difficult to copy • they relate to fulfilling customer needs • they add greater value than general competences they are often based on distinct relationships with customers, distributors and suppliers • they are based on superior organisational skills and knowledge E.g. In the motor industry, all manufacturers have the competence to build motor vehicles but BMW has core competences in design, engine technology and marketing which is the basis of it's reputation for high-quality, high performance cars. These core competences allow the company to charge a premium price and are the basis of the organisation's competitive advantage Marks & Spencer's competitive advantage is based upon its reputation for quality that arises from special relationships with suppliers that are very exacting but mutually profitable. It's relationship with customers is based upon reputation for good service, refunds and exchanges. These distinct relationships are M&S's core competences. The end result is superior performance from the unique and distinctive way that M&S develops and deploys its

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