Thursday, July 5, 2018

Core Competencies in Business

Businesses Have Core Competencies

When you think of core competence within a business, you think of the expertise of the business. The core competencies within a business are structured to reflect its skill set and the knowledge needed to set itself apart from its competitors, thus, gaining the competitive advantage to succeed. Core competencies are comprised of an organizations leadership, decision making, ethics, flexibility, influence, analytical thinking, interpersonal awareness, management skills, personal credibility, problem solving skills, management skills, and thoroughness to name a few.  
When you associate what sets your business apart from others, and the definitive the business has that helps it to succeed over its competitors, this is the businesses competitive advantage. Having a competitive advantage means the company is able to maintain a favorable advantage over its competition, for instance, Wal-Mart is known for its low-everyday prices that can't be beat in its market. They are able to obtain this by being aware of the competitions prices and are willing to price match any item, that you can prove will cost less than their own.  
The three most important core competencies are decision making, flexibility, and problem solving. Being able to make decisions required to improve the functionality of a company is very important, it is also something that has to be done on any level of a company. The decisions which are focused on the progress of the company are usually made by the hire ups and are more complex in the decision-making process. These decisions may have to be made in short notices and require the personnel making them to be logical when coming up with a solution. Having the flexibility needed to run the business, can mean providing solutions that were less likely to be made had someone now been more flexible in their decision making. The two go hand in hand. For instance, it may be easier to train someone to do a particular job, than bring someone who has the required skill set but now has to learn a different approach to how a new business runs their own company. The person doing the training has to be flexible in its decision. Problem solving skill are needed in all levels of a company, as problems will need to be figured out as the company progresses.  
It is important to use positioning of the products with pricing and availability to get the customers to buy into the product. However, the proper use of core competencies'  cannot be gauged on sales improvement alone (Harvard Review, 1990).  There is also a need for flexibility, in determining if the pricing of a product is not sufficient for sales, then adjustments need to be made. Knowing the quality of the product is a starter point of assessing how the product will develop. If the quality is good, the customers will buy into it, no matter the pricing. If the quality is poor, the product will have to be sold on the lower segment. Keeping a competitive advantage in the marketplace is important when developing a product, if in fact the company is choosing to set itself apart from its competition. Competitive advantage needs to go well beyond aspects of business management (Strategic Change, 1997).  There should be an evolving of social, cultural, political, and demographical patterns.  
Harvard Business Review (1990). Gauging Core Competence.  
 O'Shaughnessy, N. (1997). The Idea of Competitive Advantage and the Ideas of Michael Porter; Strategic Change, Vol 6, 73-83. 

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