CORE COMPETENCE

Introduction: The concept of core competencies was developed by Hamel and Prahalad It was published in their book Competing for the Future. This book became best seller in 1 !. Defintion: "# core competence are those technical capabilities $ skills that are important for achieving competitive advantage% Meaning: # core competence is a collection of skills that enables an organi&ation to provide a particular benefit to customers or the organi&ation. # core competence is not for physical products only. It can be related to services also. It is the most important strength of the company. Examples: 'ony has core competence in making product smaller. For e(ample walkman) camera etc. This capability of 'ony is called miniaturi&ation. Federal *(press of +'# has core competence in timely delivery of parcel delivery and hence they have their core competence is logistics management. Honda , core competence is in building world class engines for automobiles and generators. Characteristics: Important characteristics of core competence are; 1. Core competence is that strength of an organi&ation which is long lasting. -. It is difficult to copy by competitors .. Companies can make use of their core competence in different applications. For e(ample Honda has core competence in engines. Hence it can make use of this skill in bikes) cars) generators etc. !. The core competency must be uni/ue or superior to its competitors. 0. Core competence is mostly in the field of technology $ production. D! NT "E#: Core competencies help an organi&ation to distinguish its products from it1s competitors. It helps in reducing the costs as compared to competitors. It helps in achieving competitive advantage. It helps in creating customer value It helps in developing new goods and services It helps in building the image of the company

It helps in delivering /uality products to the customers.

DI#TINCTI!E COMPETENCE
Introduction: The concept of distinctive competence was first put forward by Philip 'le&nick in 1 02 #ndrews further developed it in 1 21.

Definition: 3istinctive competence of a firm is a collection of capabilities $ skills that a company is able to perform better than its competitors and which gives it an advantage over them.

Characteristics: Core competence is in technical areas but 3istinctive competence is in different area such as marketing activities) management capability) pro4ect management etc. #ccording to Prahlad) core competences and distinctive competencies are different. Core competence must satisfy two additional criteria. 5ne) it must be difficult to copy by competitors. 'econd) it should provide competitive advantage for more products and markets. 3istinctive competence may change with time as competitors might have achieved the same strength.

#ources of distincti$e competenc%: 3istinctive competencies can come from cost) business processes) manufacturing processes) people) customer satisfaction etc. Examples of distincti$e competenc%: Toyota has a distinctive competency in lean manufacturing. 6* has a distinctive competency in management development. 7eliance has distinctive competency in pro4ect management. They can complete any pro4ect before time. It is difficult to copy by the competitors. with the help of distinctive competence) companies can achieve competitive advantage. It provides value to the customers It helps in building the image of the company It helps in competing against the competitors It helps in maintaining the leadership position in market.