Question

list and describe several criteria for determining whether a resource/capability is a core competency. Explain fully.

Answer 1

Criteria for determining core competencies are as follows-

A. Value to the organisation- when we are determining the core competencies, we will be looking at whether these capabilities or divisions of the organisation are leading to increase in the overall value of the organisation and these are adding to the significant valuations of the organisations as significant value will mean that increasing profitability and increase in revenue generation.

B. Increasing market share- while determining the core competencies we will also look at whether the capabilities are leading into generation of market share for the company or not and if it is leading to generation of market share it would be leading into increasing of the overall core competencies

C. Duplication and imitation by its competitors- if these capabilities are unique to the organisation and these capabilities can not be duplicated by its competitor and it cannot be imitated by them so it would be leading to increased in the core competencies of the business and this will be adding to another factor for these capabilities being core competencies of business.

D. Competitive advantage- we will also look whether these competencies are leading to increasing competitive advantages of the business or not because when it would be leading to increase in the competitive advantage then it would the leading to increase in the value of the company and it will be leading to production of such goods which will be difficult to complete by the competitors.

These factors of capability is being rare and non substitutable and difficult to imitate and of significant value to the organisation will be determine whether these resources are of core competencies or not.