Businesses that do well in a recession have more goods or services that people want to buy compared to the average supplier. Why is this?
The answer lays in distinctive competencies. It sounds too obvious, and it’s much simpler to say (or write) than to convert into practical application. Below we have provided a summary overview:
- A competence is something the organisation performs. A distinctive competence is something the organisation performs materially better than its competitors.
- Distinctive competencies deliver competitive advantage.
- It is much easier to compete against organisations that have no strong distinctive competence.
- Distinctive competencies are very difficult to copy.
- Without constant renewal and refinement they will erode and lose their distinctive potential.
- It is not critical to have lots of distinctive competencies but without any you will be constantly struggling to persuade your customers your competences are good enough for the prices you charge.
- Strategic and discriminatory choices need to be made around which competencies you are going to develop into distinctive ones and which you are going to reject.
- Your choices need to be aligned with market attractiveness and for the amount of actual and potential competitive intensity
- Distinctive competencies derive from organisational capabilities, e.g. if you had the distinctive competence of being the Low Cost Producer in more sectors you would expect to find deep applied expertise around; cost and margin management, procurement, supply chain, outsourcing, resource management, MI etc.
- You need a plan to manage the development of the required organisational capabilities.
- The more learning focused and self-aware your organisation is the more easily it can develop distinctive competencies.