Core competencies refer to those capabilities of your business which give you the competitive advantage over your competitors. Over time, companies may develop key areas of expertise which are distinctive to that company. These areas of expertise may be in any area. Here are some examples of core competencies:
a) Maybank - having the largest network of ATMs in the country which provides convenience and efficiency to its customers.
b) Tesco.com - ability to design a customer interface which allows for personalized online shopping, thereby enriching the online shopping experience.
c) Dell - made-to-order computers where its customers can determine what components are to be assembled and therefore customers only pay for what they want.
d) Apple - innovative designs and technology. Apple introduces products that really wow the market.
e) Starbucks - unwavering focus on quality, outstanding customer service, continuous product improvement, care for its employees, and the desire to be everywhere.
Having a core competency at one stage of your business does not mean that it is set in stone and you can always enjoy its benefits. Your core competency may be eroded by your competitors over time. Therefore, as the business environments change, you also need to adapt, modify, or reinvent your core competencies in order to sustain your business.
So, what do you need to do for your assignment? Examine closely your business venture. Determine what it is that your business can do better than your competitors. You can have one or more core competencies. Remember - core competencies can occur anywhere in your business. It may be that your business has a fantastic sales team - that is your core competency. It may be that you are able to source your raw materials at very low cost - that is also your core competency. It may be that you have exclusive rights - again a core competency. If yours is a restaurant business and you have a chef who can conjure up dishes that are out of this world - it is your core competency!!!!! Identify your core competencies and give a clear explanation of each of your core competency. Why do you think it is a core competency? How long do you think this core competency will last? What steps do you intend to take to ensure that your core competency can be sustained as long as possible? In what way can you reinvent your core competency?
Okay, now let us look at strategic assets. These are assets without which will put the future of the business in jeopardy. Put in simple terms, these assets are very crucial to the long term survival of the business. If these assets are taken away, then there will be a big question mark on the ability of the business to continue. Examples of strategic assets would be:
a) a loyal, dedicated and experienced workforce which brings about high productivity
b) managerial competency resulting in wise decisions and strong leadership
c) data, information, knowledge, and technology which give you the extra edge in producing better quality products and shorter response time in reacting to changes in the environments
d) supplier chain allowing you to source your raw materials or goods at lower cost
e) varied and powerful network of contacts enabling you establish useful connections beneficial to the development of your business
Okay, so what do you need to do? Try identify the strategic assets that you already have or for a new startup, you may identify and develop some assets to become future strategic assets. You may want to develop and train your workforce, you may want to set up a knowledge management strategy (ask your friends who are taking Knowledge and Innovation Management under Dr Teh or you may do some research on this).
Alright, so this the end of Part 2. Try to at least finish doing this part before CNY. If you keep to this schedule, you won't be getting any nightmares when the submission deadline nears.
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