To help sustain its core competencies, a company should use them to guide its strategic visions, as well as its management priorities. A company should focus. Remember that the operations function is responsible for managing the re- this chapter we discuss the role of operations strategy, its relationship with the .. core competencies were used to develop a competitive business strategy that. which finds their roots in operations management e.g. Total Quality. Management , Time-Based significant operations capabilities, which in turn were instrumental to the core competencies of the quality circles supplier relationship kaizen.
The following graphic pictures this very well. Importance of core competences Core competencies are the collective learning of the organization, especially how to co-ordinate the diverse production skill and integrate multiple stream of technologies.
A company, if it has identified its core competencies, will be capable of creating more value. Core competences must coalesce around individuals working in the organization. These people should recognize their effort in building and strengthening these core competencies. The competences act as the glue which bind businesses together as well as pave the way for new business development.
In other words core competences of a business are also guiding parameters for new markets and diversification. Strategic intent The process of developing core competencies starts with the strategic intent of being a leader in the market by leveraging the resources. This thought of being a leader in the market is called strategic intent.
This concept points out to identifying various opportunity gaps. It is an obsession with writing a competitive agenda, for a long period of time, which is shared with the whole organization. Strategic intent provides a basis for stretching the goals of the organization with barrier breaking initiatives.
Framework for leverage strategic architecture The next stage towards developing the core competencies is to leverage the current resources of the organization. This stage is known a developing the strategic architecture. Strategic architecture is a roadmap which predicts what core competencies to build and which related technologies are needed.
This step requires the distillation of past and present data to answer the following questions: It is helpful in more than one way. Apart from being a useful tool for managing innovation, it also helps in identifying alliances and acquisitions of strategic importance. Internally, this helps the lower management to allocate resources and upper management to keep focus. Leveraging resources and thereafter the development of core competencies requires investment in three different things: If not, then you will hamper the development of core competencies.
Leveraging Core Competencies in Operations & Supply Chain Management
Thus, a company should invest in good governance and learning environment and not just technology. Identifying core competencies Core competencies play an important role in the process of leverage. We can identify them using three simple tests: Does the trait provide a major competitive differentiation? Does it provide a unique value proposition to the organization?
Does the trait cover a lot of business or is useful only for a single business unit? Is it useful only for current business or for new ones too? Is it hard for competitors to imitate? Core competencies extend to the whole organization, and are part of tactical learning at the same time.
Core Competencies - An essential for Organizational Success
We should not confuse a core competence with a core technology. We should also differentiate between core competencies and core capabilities before moving forward. Core capabilities are crucial for survival but, unlike a core competency, does not confer any specific differential advantage over other competitors in the industry.
Importance of core competencies The most important advantage of having core competencies is having a long term competitive advantage. These competencies help in bridging the gap between performance and opportunity, thus helping a company in being a potential leader in the industry.
By linking traditional business to products and service of the future, the company acquires greater opportunity for success. This also helps in activation of the company by acting as a guideline for diversification.
Core competencies are also an indicator that resources are being used in the right places in the right amount.
An organization should focus on outsourcing all non-core activities which will streamline the operations to encourage learning environment congruent to their competencies. Core competencies also help in the development of core products. They should have access to all the primary component of a complex product which can help in long term foothold in that particular industry.
This complex product can then be used to create a pipeline of products.
- Strategic intent
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- Definition of Core Competencies
Core competencies are meaningful if they are related to an attribute valued by the market. Intel particularly uses this. Their core competence lies in developing an array of microprocessors in very short time.
With the proved attribute of speed and quality against other competitors, this core competency provides a distinctive competitive advantage.
The more unique, valuable and firm specialized the resources are, the more possibly the firm will have core competency. Organizational capabilities are generally a result of organizational system, processes and control mechanisms. These are intangible in nature. It might be that a firm has unique and valuable resources, but if it lacks the capability to utilize those resources productively and effectively, then the firm cannot create core competency. The organizational strategies may develop new resources and capabilities or it might make stronger the existing resources and capabilities, hence building the core competencies of the organization.
It helps in creating customer value. Also, core competencies help in creating and developing new goods and services. Core competencies decide the future of the organization. These decide the features and structure of global competitive organization. Core competencies give way to innovations. Using core competencies, new technologies can be developed.