capabilities and competences
Capability-based strategies derive from the notion that internal assets and key competencies derived from distinctive capabilities provide the approach platform that underlies a firms long lasting profitability. Analysis of these functions begins with a company functionality profile, which will examines a companys strengths and weaknesses in 4 key areas:
- Managerial
- marketing
- financial
- technical
Then a SWOT evaluation is carried out to determine if the company provides the strengths essential to deal with the actual forces in the external environment. This examination enables managers to identify:
Stalk, Evans and Schulman (1992) have discovered four concepts that serve as guidelines to achieving capability-based competition:
Capability-based strategies, at times referred to as the resource-based perspective of the company, are dependant upon (a) those internal resources and functions that provide the platform for the firms technique and (b) those solutions and capabilities that are the principal source of profit for the firm. The management function is to recognize what reference gaps should be filled in in an attempt to maintain a competitive border where these capabilities are required.
Several levels could be established in defining the firms overall strategy platform (see figure). At the bottom in the pyramid are the basic methods a firm provides compiled with time. They can be grouped as technological factors, competitive factors, bureaucratic factors, and financial elements.
Core competencies can be explained as the unique mixture of the resources and experiences of any particular firm. It takes a chance to build these types of core expertise and they are challenging to imitate. Critical to sustaining these core competencies exist:
