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Paper Topic:

Core Competency

Core Competencies and its Significance to an Organization

Core competencies are described to be the capabilities that underlie leadership in a range of products or services . Simply put , these core competence , sometimes referred to as distinctive competence , is what an organization possesses in terms of skill sets and capabilities - qualities that enable the firm to meet the demands of its market better than its competitors . It is important to distinguish between a company 's assets , environmental circumstances , and core competence

In this regard , core competencies are the gateways to future

opportunities . Leadership in core competence represents a potentiality that is released when imaginative new ways of core competence are envisioned . One of management 's most important tasks when executing strategy is to cultivate the necessary skill sets aptitudes , and capacities that will give the organization a continued competitive advantage . Understanding the vital role that core competencies play in an organization 's overall strategy is key to achieving its strategic intent . By effectively bundling these competencies , knowledge , and special abilities , a company can create their competitive advantage , enhance customer value , and expand their market position

Seen as gateways to the future , these competencies that are most valuable are those that represent a gateway to a wide variety of potential product markets . An analysis of investing in core competence leadership is like investing in options . When the core competence of a leader possess an option , his participation in the range of end-product markets depend most on that core competence . An example of this is when Hewlett-Packard 's competencies in measurement computing and communications gives the company a prime advantage in opting to participate in a broad array of markets that require excellence in those skill areas . Another example is Sony 's unrelenting pursuit of leadership in miniaturization has given it access to a broad array of personal audio products . 3M 's core competencies in adhesives , substrate , and advanced materials have spawned tens of thousands of products . However this deal could be counteracted if a company fails to build on core competence leadership , it may be foreclosed from not just one product market , but from a broad range of market opportunities . This is because core competence is a bundle of skills and technologies that enable a company to provide a particular benefit to customers . A firm 's core competence , for example , may be its ability to process and distribute customer-profiling information faster than its competitors , giving it an edge in meeting the customer 's high expectations of service . Not only is this competency linked to the abilities of the IT personnel , but the skills of those in customer service , sales , marketing , product design and manufacturing as well . It is assumed that in this particular example , quality customer service is a critical success factor of the industry

The root of a firm 's core competence rests in its people skills . These skills normally transcend traditional functional arms such as marketing production , operations , and engineering , and involve knowledge-based activities such as product design , innovation , and...

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