Friday, March 26, 2010

Concept of strategic advantage and core competencies

Concept of strategic advantage and core competencies
Strategic advantage is competitive advantage.It is gaining advantage over competitors.It is based on internal strengths of the organization.
Combination of unique resources and core competencies determine strategic advantage.
  1. Unique resources are valuable,rare,costly to imitate and non-subsistence's resources.They are the primary source of strategic advantage.
  2. Core competencies are organization's well performed activities.They are capability factors central to organization's strategy.The organization does them well compared to other internal activities.They generally reside in people and other functions.Example of core competencies are :
  • Speed in developing new products.First in the market.
  • Skills in inter gating multiple technologies to manufacture high technology systems and network.
  • Expertise in developing information communication technology system and networking.
  • Low cost structure.
  • Better capability in after- sales service.
Distinctive competency :It is something the organization does well relative to competitors.Core competencies can become distinctive competencies.
3)Unique resources and core competencies represent critical success factors for an organization.They help organization to excel in outperforming competitors.They are combined to gain strategic advantage.

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