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Core capabilities and distinctive competencies

Normally, most companies owned and control most of the resources that enter their businesses. These include human resources, materials, machines, information and energy.

But these have change significantly. Many companies now out-source less critical resources if they can get higher quality or lower cost.

India has developed reputation as country that can provide ample outsourcing support.

Nowadays th key is to own and nurture the resources and competencies that make up the essence of the company business.

Nike, for example does not manufacture most of its shoes, because a certain Asian manufacturer is more competent in this task. What Nike does instead is to nuture  its core capabilities: superiority in shoe design and merchandising.

A core capability has two features:

1. It makes significant contribution to customer value.

2. Competitors sometimes find it to imitate 

Competitive advantage is enjoyed most from when a company possesses distinctive capabilities

Core capabilities may be area of technical and production expertise, distinctive capabilities describes excellence in broader business processes.

Back in 1997, a silicon valley based NETFLIX demonstrate its capabilities by pioneering online DVD rental while most people were still struggling with their VCRs. The founder Reed Hastings that DVD was the home medium of the future.

He raised some funds, started,  attracted many customers and took the business public 2002.

NETFLIX distinctive capabilities was then, premised on overnight delivery, deep catalog of 65,000 movie titles, linked to proprietary search softwares, that allowed customers to search for obscure films and discover new one.

The Ransford Business School an online based institution offers great case stories about organizations and businessmen and women that have demonstrated what it takes to manage businesses successfully. It also offers 6 modules program in 3-Month only, a Mini MBA program designed to sharpen executives skills to perform extremely in their organizations.







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