Competence A competence becomes a core competence when the well-performed activity is central to the companys strategy, competitiveness, and

d profitability Often, a core competence results from collaboration among different parts of an organization Typically, core competencies reside in a companys people, not in its physical assets A core competence gives a company a potentially valuable competitive and collaborative advantage

Competencies
Distinctive competencies

Core Competencies Competencies

Examples of core competencies Skills in manufacturing a high quality product System to fill customer orders accurately and swiftly Fast development of new products Better after-sale service capability

 Superior know-how in selecting good retail locations Innovativeness in developing popular product features Merchandising and product display skills Expertise in an important technology Expertise in integrating multiple technologies to create whole families of new products The Sustainability of Competitive Advantage Barriers to imitation Speed of imitation by competitors in reducing advantage Imitation by acquiring similar resources Imitation of capabilities (more difficult) Limits on competitors Prior strategic commitments Absorptive capacity for change Industry dynamism The rapid innovation shortens product life cycles Avoiding failure and sustaining competitive advantage Focus on the building blocks of competitive advantage. Institute continuous improvement and learning. Track best industrial practice and use benchmarking. Overcome inertia.

A long-term competitive advantage that is not easily duplicable or surpassable by the competitors. Developing Sustainable Competitive Advantages Customer Loyalty: Customers must be committed to buying merchandise and services from a particular retailer. This can be accomplished through retail branding, positioning, and loyalty programs. A loyalty program is like a "Target card." Now, when the customer uses the card as a credit card, Target can track all of their transactions and store it in their data warehouse, which keeps track of the customers needs and wants outside of Target. This will entice Target to offer products that they do not have in stock. Target tracks all sales done on their cards. So, Target can track customers who use their card at other retailers and compete by providing that merchandise as well. Location: Location is a critical factor in a consumer's selection of a store. Starbucks coffee (shown here Figure 1) is an example. They will conquer one area of a city at a time and then expand in the region. They open stores close to one another to let the storefront promote the company; they do little media advertising due to their location strategy. Distribution and Information Systems: Walmart has killed this part of the retailing strategy. Retailers try to have the most effective and efficient way to get their products at a cheap price and sell them for a reasonable price. Distributing is extremely expensive and timely. Unique Merchandise: Private label brands are products developed and marketed by a retailer and available only from the retailer. For example, if you want Craftsman tools, you must go to Sears to purchase them. Vendor Relations: Developing strong relations with vendors may gain exclusive rights to sell merchandise to a specific region and receive popular merchandise in short supply.

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Customer Service: This takes time to establish but once it's established, it will be hard for a competitor to a develop a comparable reputation. 7. Multiple Source Advantage: Having an advantage over multiple sources is important. For example, McDonald's is known for fast, clean, and hot food. They have cheap meals, nice facilities, and good customer service with a strong reputation for always providing fast, hot food.
Example of Companies with Sustained Competitive Advantage 1. Strong research and Innovation The technology industry is one of the leading industries with respect to strong research and innovation. And when it comes to setting the pace using innovation as leverage;Apple and Sony are the two companies that have held their leadership position using innovation as a competitive advantage.

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Brand Popularity

Being recognized all over the world as a respected brand is a sustained competitive advantage that companies such as Virgin, Apple and Coca cola have used as leverage to hold the market sway for years. Virgin is a company that has used its brand name as leverage to break into new markets in completely new territories. 3. Corporate reputation Corporate reputation is a form of sustained competitive advantage that companies such as Price Waterhouse and Berkshire Hathaway have leveraged to become world class entities. 4. Strategic assets Holding strategic assets such as patents is a strong source of sustained competitive advantage and General Electric has stood the test of time because of the several patents held. Mind you that possession of these strategic assets has madeGeneral Electric one of the most powerful companies in the world. 5. High volume production Dangote Group of companies became one of the leading conglomerates in Africa because of its ability to produce goods on high volume and ensure a uniform price throughout Nigeria. 6. Access to working Capital

Generally, public liability companies (quoted companies) have a sustained competitive advantage over private companies because of their infinite capacity to raise capital from the public. Take a look at how Oracle acquired 57 companies in a space of five years and Reliance Industries investing a billion dollars in a single swoop to open a chain of retail stores. 7. Barriers to Entry Barriers to entry due to government restrictions and regulations have been the source ofsustained competitive advantage for companies such as Telmex and Chevron. 8. Superior Product or customer support IKEA has become a market leader in the furniture industry because of its ability to provide superior product at an affordable rate; backed by a strong customer support system.

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Exclusive re-selling or distribution rights

The Coscharis Group has become one of the leading automobile retailers in Nigeria and West Africa at large because of its possession of exclusive distributorship of BMW brand throughout West Africa. 10. Ownership of capital equipment

Ownership of capital equipment can be a source of sustained competitive advantageand Julius Berger has proved it by becoming a leading company in the construction industry. 11. Flexibility The ability to change swiftly is a strength and source of sustained competitive advantage that Microsoft leveraged upon to become the largest software company in the world. 12. Speed and Time Speed and time was once an overlooked source of sustained competitive advantage until FedEx and Domino Pizza used it as leverage to become industrial pacesetters. 13. Low pricing Wal-Mart as at the time of this writing is the most capitalized company in the world. Thanks to its low pricing strategy that became its strong source of competitive advantage. 13. capabilities GTBank, AT&T, Google, Facebook have become market leaders in their various niches because of the superior database management and data processing capabilities they possess. As a final note, these are the sources of sustained competitive advantage and the corresponding companies that leveraged such advantage. The message I am trying to pass across through this article is that you dont have to win at every level; you just have to win at one level. If you cant win with innovation, you can win with speed and flexibility. Superior database management and data processing