capabilities and competencies – core competencies
Post on 07-Apr-2018
260 Views
Preview:
TRANSCRIPT
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 1/14
CAPABILITIES AND COMPETENCIES
►
Capability-based strategies are based on thenotion that internal resources and core
competencies derived from distinctive
capabilities provide the strategy platformthat underlies a firm's long-term
profitability.
► Evaluation of these capabilities begins witha company capability profile, which
examines a company's strengths and
weaknesses in four key areas:
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 2/14
► Managerial
► Marketing
► Financial► Technical
Then a SWOT analysis is carried out to determine
whether the company has the strengthsnecessary to deal with the specific forces in theexternal environment. This analysis enablesmanagers to identify:
► external threats and opportunities, and
► distinct competencies that can ward off thethreats and compensate for weaknesses.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 3/14
►Capability-based strategies, sometimes referred toas the resource-based view of the firm, are
determined by:► (a) those internal resources and capabilities that
provide the platform for the firm's strategy and
► (b) those resources and capabilities that are theprimary source of profit for the firm. A keymanagement function is to identify what resourcegaps need to be filled in order to maintain a
competitive edge where these capabilities arerequired. Several levels can be established indefining the firm's overall strategy platform (seefigure).
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 4/14
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 5/14
►At the bottom of the pyramid are the basic
resources a firm has compiled over time. They
can be categorized as technical factors,competitive factors, managerial factors, and
financial factors.
►Core competencies can be defined as the uniquecombination of the resources and experiences of
a particular firm. It takes time to build these core
competencies and they are difficult to imitate.Critical to sustaining these core competencies are
their:
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 6/14
► Durability - their life span is longer than
individual product or technology life-cycles, as
are the life spans of resources used to generatethem, including people.
► In transparency - it is difficult for competitors
to imitate these competencies quickly.► Immobility - these capabilities and resources
are difficult to transfer.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 7/14
CORE COMPETENCIES.
►Core competencies are those capabilities that arecritical to a business achieving competitive
advantage.
►The starting point for analyzing corecompetencies is recognizing that competition
between businesses is as much a race for
competence mastery as it is for market positionand market power.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 8/14
►Senior management cannot focus on all
activities of a business and the competencies
required to undertake them. So the goal is formanagement to focus attention on
competencies that really affect competitive
advantage.
►Core Competencies are not seen as being fixed .
►Core Competencies should change in response to
changes in the company's environment. They are
flexible and evolve over time.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 9/14
►What is Core Competency?
►Core competency is a unique skill or technology
that creates distinct customer value.►As an organization grows, develops and adjusts to
the new environment, so do its core competencies
also adjust and change.►core competencies are flexible and developing with
time. They do not remain rigid and fixed.
►The organization can make maximum utilization of the given resources and relate them to new
opportunities thrown by the environment.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 10/14
►Resources and capabilities are the building
blocks upon which an organization create and
execute value-adding strategy so that anorganization can earn reasonable returns and
achieve strategic competitiveness.
►
Resources are inputs to a firm in theproduction process.
►These can be human, financial,
technological, physical or organizational.►The more unique, valuable and firm
specialized the resources are, the morepossibly the firm will have core competency
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 11/14
►Resources should be used to build on the strengthsand remove the firm’s weaknesses. Capabilities
refer to organizational skills at integrating it’steam of resources so that they can be used moreefficiently and effectively.
►Organizational capabilities are generally a result of
organizational system, processes and controlmechanisms.
►These are intangible in nature. It might be that a
firm has unique and valuable resources, but if itlacks the capability to utilize those resourcesproductively and effectively, then the firm cannotcreate core competency.
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 12/14
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 13/14
►The organizational strategies may develop new
resources and capabilities or it might make
stronger the existing resources and capabilities,hence building the core competencies of the
organization .
►Core competencies help an organization todistinguish its products from it’s rivals as well as
to reduce its costs than its competitors and
thereby attain a competitive advantage. It helps
in creating customer value .
8/4/2019 CAPABILITIES AND COMPETENCIES – CORE COMPETENCIES
http://slidepdf.com/reader/full/capabilities-and-competencies-core-competencies 14/14
►Core competencies give way to
innovations. Using core competencies, new
technologies can be developed.
► They ensure delivery of quality products
and services to the clients.
►These decide the features and structure of
global competitive organization.
top related