Distinctive competencies

From CEOpedia | Management online

Distinctive competencies are a unique and difficult for others to replicate group of competence decided to a large extent about the competitive advantage of the company.

"Sociologist Philip Selznick (1957) was the first to identify and label distinctive competence as a particularly valuable capacity and resource for organizations. He believed that a key role for organizational leaders is to identify, invest in, and protect such competencies and the resources underlying them."[1]

Features of the distinctive competencies

Distinctive competencies are distinguished by such features as[2]:

  • rarity among competitors;
  • difficulty of imitation;
  • value in terms of exploiting opportunities or warding off threats;
  • resulting provision of competitive or collaborative advantage;

They are a source of enduring advantage. They are not a single competency but group may arise from patterns of links competencies.

Key competence

With the development of the global market and the increase in the number of competitors, companies have begun to look for new areas that will allow them to stand out from others. While the possession of resources in the form of experts is not the best solution because it carries the risk of passing these experts to the competition or is easy to copy (by employing other experts with the same skills), a great solution is the key competence, which is a resultant of a few variables and are created through a unique combination of different skills. Thanks to this competition, it is not possible to easily copy or duplicate this formula (here: distinctive competencies). It gives new and additional opportunities to build an advantage in the world, where it is increasingly difficult to find unique solutions.

Analysis of the key competences

To determine key competences, we must carry out an analysis including[3]:

  • Understandings of core phenomenon and related disciplines;
  • Understandings of general phenomena;
  • Understandings of product/service technologies;
  • Understandings of product/service sub-technologies;
  • Understandings of product/service classes;
  • Skills;
  • Integrated skills;

Discovering distinctive competencies

First step in discovering distinctive competencies are conceptual analysis to corporate documents concerning the company's products and services. Competences are a means to maintain and support products or services provided by the company. We should use both explicit and confidential documents to perform the analysis. The analysis should include:

  • Business statements within annual reports of the last two to three years;
  • Current corporate profiles in Social Media;
  • Product overviews;
  • Product catalogs;
  • Research laboratory agendas and reports;
  • Technical briefs and white papers;

If it is possible, we should also use documents from external sources, such as press articles, interviews, feature articles and anything similar to the described company.

Next step is verifying distinctive competence breadth and dynamic by combining competence breadth findings in order to depict the iterative interactions across them. Here we can see how singular skills are combine into an integrated one. It is very important to understand in these step which competencies are basic, which can be easily replaced, and which are optional but useful.

Last step is enhancing understanding of competence dynamic and elements by interviews with the intellectual leaders of the corporation, whether executives leading large divisions or individual scientists and engineers. We can identify them use criteria like their intellectual diversity and their reputation within the firm for being knowledgeable and thoughtful concerning the firm's intellectual strengths. During the interview, we should ask them about the competences used in their area and present them the results of their research so far. It is a good practice to conduct interviews using the method "tree and branch" where tree trunk is core topic, and the branches is main question. Then we can explore every branch in different degree of depth.

Examples of Distinctive competencies

  • Access to resources: A company may have access to a unique combination of resources that its competitors do not. This could include access to capital, special tax benefits, privileged access to scarce materials, or a unique set of human resources.
  • Brand reputation: A company may have a well-established brand reputation that is recognized by customers and supports its competitive advantage.
  • Innovative products: A company may have an innovative product line that is difficult for competitors to replicate.
  • Strategic partnerships: A company may have strategic partnerships with suppliers or customers that provide it with a competitive advantage.
  • Cost advantage: A company may have a cost advantage due to economies of scale, access to cheaper materials, or other cost-cutting measures.
  • Processes and procedures: A company may have processes and procedures in place to increase efficiency and reduce costs.
  • Customer service: A company may offer superior customer service that is difficult for competitors to match.
  • Distribution channels: A company may have established distribution channels that provide it with a competitive advantage.
  • Human capital: A company may have access to a unique pool of human capital that is difficult for competitors to match.
  • Intellectual property: A company may have unique intellectual property that provides it with a competitive edge.

Advantages of Distinctive competencies

Distinctive competencies are a set of advantages that a company has that are hard for rival firms to replicate. These competencies give the company a competitive edge and can help it to become a market leader. The advantages of having distinctive competencies include:

  • Increased competitive advantage: Having a unique group of competencies allows a company to stand out from the competition and gain a competitive advantage.
  • Improved customer loyalty: Customers are more likely to remain loyal to a company that has a unique set of competencies that other companies do not have.
  • Cost savings: Unique competencies can help a company reduce costs by streamlining processes and making them more efficient.
  • Innovation: Having a unique set of competencies can help a company be more innovative and create new products that are better than their competitors.
  • Attracting talent: A company with a distinctive set of competencies can attract the best talent in the industry, helping it to remain competitive.

Limitations of Distinctive competencies

Distinctive competencies are a set of unique competences that set a company apart from its competitors and provide a basis for a sustainable competitive advantage. However, there are certain limitations to distinctive competencies, such as:

  • Cost: Acquiring and maintaining distinctive competencies can be very costly, especially if the company does not have existing resources.
  • Complexity: Developing and managing distinctive competencies can be complex and time-consuming, as the process requires a thorough understanding of the company’s current position and future goals.
  • Limited Resources: Obtaining and maintaining distinctive competencies requires significant resources, including personnel, technology, and capital.
  • Time: It takes time to develop and maintain distinctive competencies, and the process can be lengthy and complicated.
  • Changing Environment: Distinctive competencies can lose their value in a rapidly changing environment, as they can become outdated or no longer be relevant.
  • Competitor Response: Competitors may respond to distinctive competencies by developing their own set of capabilities, which can reduce or eliminate the company’s competitive advantage.

Other approaches related to Distinctive competencies

Distinctive competencies are a unique and difficult for others to replicate group of competence decided to a large extent about the competitive advantage of the company. Other approaches related to Distinctive competencies include:

  • Core Competencies: These are the unique, resource-based capabilities of an organization that can be used to create a competitive advantage. Core competencies are often difficult to imitate and are the basis of a company’s competitive advantage.
  • Strategic Alliances: These are formal agreements between two or more parties to cooperate in order to achieve a specific goal. Strategic alliances can be used to gain access to scarce resources and capabilities, increase the range of products and services offered, and develop new markets.
  • Knowledge Management: This is the process of acquiring, organizing, and sharing information within an organization. Knowledge management can be used to develop and maintain a competitive advantage through the leveraging of an organization’s available knowledge.
  • Innovation: This is the process of creating something new or improving an existing product or service. Innovation can be used to differentiate a company from its competitors and create a competitive advantage.

In summary, distinctive competencies are just one approach among many that organizations can use to create a competitive advantage. Other approaches include core competencies, strategic alliances, knowledge management, and innovation. Each approach can be used to create a unique set of resources and capabilities that can be used to gain a competitive advantage.

Footnotes

  1. ↑ Bryson J.M., Ackermann F., Eden C. (2007)
  2. ↑ Bryson J.M., Ackermann F., Eden C. (2007)
  3. ↑ Edgar W. B., Lockwood C. A. (2009)


Distinctive competencies — recommended articles
Business model innovation — Opportunity analysis — Related diversification — Lateral integration — Types of strategies — Knowledge capital — Internationalization — Innovative systems — Market development

References

Author: Gabriela Lupa

Retrieved from "https://ceopedia.org/index.php?title=Distinctive_competencies&oldid=91618"