Relevance of Core Competency for the Attainment of Competitive Essay

Relevance of Core Competency for the Attainment of Competitive Advantage - Essay Example The exponential increase in competition compels the organizations to implement effective strategies with the aid of strategic analysis to survive in the market. Olson and Bolton (2002) stated that the attainment of competitive advantage and development of core competencies have become two of the main goals of business owners in the prevailing times. 2. Overview of Competitive Advantage and Core Competency The domain of competitive advantage has been studied by numerous researchers over the years. Michael Porter is one of the prominent researchers in the study of strategic management and strategic analysis; he stated that competitive advantage is defined as the strategies implemented by an organization to compete in the market while combating the external forces in the environment. The possession of competitive advantage enables the company to have an edge over the prevailing services and products in the market. One of the most vital contributions of Porter (1998) has been the accumul ation of strategies to attain competitive advantage in the form of â€Å"Wheel of Competitive Advantage†: Figure 1: Wheel of Competitive Strategy (Porter, 1998) It can be seen from the above figure that the attainment of competitive advantage is spread across all the departments and functions of an organization while being influenced by the goals and objectives of the organization. Dividend Tree (2009) stated that core competencies bear great relevance for any organization since they facilitate survival in competitive markets. Brown (2002) defined core competencies in a simple manner and stated that core competencies are those tangible and intangible resources of a company that enable a company to compete in the market in the presence of competitors. Core competencies become sources of great revenues and value for the customers. Gardelliano (2002) stated that core competencies may be an outcome of the following factors: Related Knowledge: Knowledge is an important intangible asset for any organization, for example, customer buying behaviors, sales forecasting on the basis of past and current sales records etc. Set of Skills: Set of skills includes the abilities to perform business operations, for example implementation of business plans, level of expertise possessed by the employees etc. Attributes: Attributes are related to the qualitative aspects of the business operations that might include the quality of the service, customer relations etc. The amalgamation of these aspects results in the production of core competencies for organizations and makes their service and products unique as compared to the competitors in the market. 3. Process of Development of Core Competency Organizational identity is a relevant asset since it has an effect on the competitive advantage of any organization. Glowa (2001) explained that the identity of an organization is an accumulation of the unique aspects, organizational performance and core values that it can introduce in its services and products. Jeyavelu (2006) stated that if organizational identity is directed towards the achievement of unique business goals and operations of the company then it can contribute towards the attainment of competitive advantage. However, Voss, Cable and Voss (2006) pointed out that these factors cannot bear much relevance if organizational identity is not supported by the top management of the organizati