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What is the difference between core competency and distinctive competency? And how can...

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asomah | Student | eNotes Newbie

Posted May 16, 2010 at 5:12 PM via web

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What is the difference between core competency and distinctive competency? And how can firms gain a distinctive competency?

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted May 16, 2010 at 9:47 PM (Answer #1)

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Competency refers to the ability of a firm to carry out an activity well. It is built and developed by firms consciously through experience and learning. A competency reside in people in the firm and not in physical assets.

A Core competency is an activity central to a firm's profitability and competitiveness that is performed well by the firm. Core competencies create and sustain firm's ability to meet the critical success factors of particular customer groups.

A distinctive competency is a competitively valuable activity that a firm performs better than its competitors. These provide the basis for competitive advantage. These are cornerstone of strategy. They provide sustainable competitive advantage because these are hard to copy.

Acquisition of any competency is process that requires sustained and deliberate effort over extended periods to gradually build up real proficiency in performing an activity. It often entails:

  • Selection of people with required knowledge and skills.
  • Improving and expanding the knowledge and skill of the people in the organization through various human resources development initiatives.
  • Developing effective collaborative working culture and systems among groups of people.
  • Making conscious effort to build intellectual capital. Among others. this includes developing and introducing effective knowledge management systems.

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