Distinctive Competences Essay Sample

Type of paper: Essay

Topic: Company, Market, Business, Customers, Firm, Workplace, Finance, Employee

Pages: 7

Words: 1925

Published: 2020/12/28

In every organization, rational management advances the set objective with a clear objective to maximize shareholders returns through cost-effective production and satisfy the target customers. To an attaining sustainable customer satisfaction, product price, high quality, and ease of product and services access to the market must feature as part of distinct factors that would drive a firm towards unprecedented market dominance and strengthen a long-term sustainable market advantage over market rivals. A company could invest in the current market technology machines necessary to hasten production efficiency and eliminate the lead time and cost factors that con summers on the firm’s economic profitability. Unfortunately, the company could lack an equivalent skilled team of workers capable of handling the efficiency of the new machines. In that case, the invested technology may achieve below standard results thus incurring further operation cost to the firm’s income statement. Based on the scenario, it would be logic to assert that a firm that intends to advance its production efficiency ought to integrate the resources with the associated capabilities to achieve the desired economic objective.
In the current century, the rapid growth in technology has influenced the manner in which firms conduct their daily business activities. Technology has bridged the information asymmetry gap that exists between the consumers and the market players thus customers are aware of product quality, convenience, and affordability (Colombo & Grilli, 2005). To keep abreast with the insatiable consumer nature, firms have invested enormous funds in research and development in an effort to match the consumers’ expectations for high product quality and retain its economic objective trend. The distinctive resources form the basis of developing a firm’s market advantage by increasing the customers switching costs to substitute companies.
A firm’s distinctive competence entails human capital, technology investment, customer satisfaction, corporate social responsibility, organization structure and culture, investment in research and development, production strategy and cost-effectiveness (Mooney, 2007). These competencies require the integrated interaction among all stakeholders where every shared value responsibility culture of operation prevails.
The cultural diversity of firm’s workforce contributes immensely to the company’s production strategy plan. A rational management remains conscious of the variations in the employee’s personal attitude and their mental perceptions in handling various social and personal tasks. Emotional intelligence is one of the distinctive competency that accommodates emotions of different employees in the strive to enhance the cohesiveness in the workplace. Based on social and psychological theorists, human beings have the tendency of absorbing their peers’ social characters and utilizing them while approaching similar situations. For instance, some individuals grew in culture with a high power index thus would find difficult to oppose their seniors’ orders. Alternatively, other employees believe in a consultative approach during decision-making process. Therefore, a firm must appreciate the cultural diversity and incorporate the factors in the company’s strategic plan. Further, the cultural beliefs and practices recognized by various employees ought to be entrenched in the ethical code of principles as an approach towards maintaining an enabling environment for the workers.
Investment in technology is the driving force to firm’s market sustainability. Through technology, a firm succeeds in producing differentiated products that suit the consumers changing tastes and preferences thus strengthening consumer’s loyalty. For instance, a company that integrates an integrated supply chain system into the operation strategy would be able to monitor the degree of firm responsiveness to the market demand – a factor that would save the company’s delayed costs between production and customers demand for the products and services. Moreover, technology advancement improves the quality of products and service and facilitates the ease of the product’s market penetration in existing and new markets. Notably, investment in technology resource is a sensitive aspect that could result in employee demoralization and overlapping of responsibilities if not applied effectively. For instance, if a new machine is introduced in the production sector, some job responsibility could be harmonized while others could be declared redundant. To avert the social crisis, the firm should incorporate the employees into the new changes by conducting relevant training to employees that match the new technology demands.
However, it would be difficult to advance production technology devoid of financial resources. A firm with a deficient budget derails in responding effectively to the market change in terms of product diversification and change in consumer taste. Financial resource is a distinctive competence influenced by the shareholder’s capacity and the firm’s creditworthiness. Ploughed-back profits may be unsustainable for a firm to implement its strategic plan. In that case, consideration for external borrowing is an imperative approach to replenish the under capacity for operation. The essence of financial resources is to boost the firm’s degree of market responsiveness to potential threats from new and existing rivals as well as cautioning against unforeseen economic uncertainties such as a global recession. Globalized firms adopt product diversification strategy such as conglomerate to expand its pool of risk and safeguard the shareholder’s return. With a stable financial capacity, a firm can employ efficient capital equipment and skilled manpower.
Every firm has an obligation to conduct its operations by adhering to the ethical principles and the stakeholder’s social welfare. The practice goes beyond the profitability objective and acts as connective aspect between the company and the stakeholders. For a company to be successful, economic theorists argue that the strategic plan must be cognizant with the employee’s social welfare, consumer satisfaction and the surrounding society (Porter, 2008). The top-bottom line approach is an essential distinctive competence in strengthening the competitive advantage of an enterprise. Participation in community activities such offering education sponsorships, cleaning the environment characterize a firm’s consciousness to the society’s welfare. In addition, providing fair remunerations, performance appraisal and protecting workers from health hazards are key ingredients necessary for improving employee’s motivation and building sustainable relationship with the surrounding community. The initiative incurs cost to the firms, but their results are indirectly realized over a prolonged period of operation. The surrounding society serves as the stepping stone for a products penetration in the market hence maintaining a good relationship increases customer loyalty.
Another distinctive capability factor is the firm’s investment in human capital. The capacity of labor skills is paramount in realizing the anticipated objectives outlined in the strategic plan. Through transformational leadership, management conducts periodic training to their employees to equip them with relevant market skills. Labor skills are influencing the performance of capital equipment at the expected level to improve production capacity and ease operation cost. Attaining a long-term competitive advantage requires the management to employ competent workers with necessary skills that match the market environment. However, retaining a consistent market advantage cannot be served by employing skilled workers only but rather the employee skills ought to match an equivalent wage structure. Additionally, establishing a value-chain based performance appraisal would play a critical role in enhancing cohesion and enabling environment at work.
Consumer satisfaction is core distinctive capability that most firms apply in differentiating themselves from other market players. Through technology revolution, eradication of information asymmetry has prompted business to capitalize on the consumer relationship management in an effort to lure consumer’s preference and increase their loyalty. The value chain based approach retraces the interaction of suppliers, intermediaries and the producers to ensure that the consumers access goods in time and at an affordable price. The distinctive capability helps a firm to withstand intense competitive rivalry induced by other competitors in the market. Firms that conduct periodic surveys on the level of product satisfaction to the target consumers have a strong competitive advantage over other market players. Most firms derive their core values based on consumer’s welfare in quality production at an affordable price. In principle, consumer satisfaction accelerates the products brand identity in the market.
A rational management remains ahead of its competitors by engaging in market research to understand consumers’ responsiveness and sentiments on the available products and services. Research and development refer to the practice of delving into identifying how consumers react to the company’s products and services, and capitalize on the data to improve its production strategy. Creating a consistent culture of research among the employees forms the basis for unprecedented innovation of efficient products and services. However, it is imperative for a firm to differentiate formidable research as the foundation for improving operations from enlightened self-interest initiatives. Some managers could initiate restructuring the organization’s corporate strategy through research with a sole motive to incur personal gains at the company’s expense. Realizing research and development requires that firms introduce an appraisal approach to reward workers who develop new initiatives. Accommodative approach is a core aspect of fostering the open-mindedness of the workers and bending them into the company’s operation strategy
However, the distinctive competencies encounters organizational and operation challenges that inhibit their contribution in the developing a sustainable competitive advantage. One of the major challenges is the bureaucratic nature of leadership. Unilateral decision-making breaks the value-based chain culture between the management and stakeholders and discouraging innovation. The management feels that endorsing junior employees ideas would overshadow the mandate of the executive. Moreover, autocratic leadership demoralizes the employees since the imposed policies often overlook the impact of moral virtues in the ethical decision-making. Another challenge is financial constraint particularly the start-up enterprises. Inadequate financial capital deters a firm from promoting equitable and sustainable social welfare of the stakeholders (Eden & Ackermann, 2010). Unfortunately, the deficiency gap could prompt consumers, workers and other stakeholders to shift their allegiance to rival parties. Such a scenario complements the resource base view approach that proposes that a firm can strengthen its competitive advantage by focusing on material and financial resources to advance its strategic policies.
In summary, competitive advantage is unsustainable without strong distinctive competencies that uphold the market dynamic changes and the organization culture among stakeholders. Managers should realign their corporate strategies to accommodate necessary resources and capabilities to respond effectively to the market demands and withstand competitive rivalry. Restructuring an organization structure to integrate the organization’s cultural diversity would boost the innovation trend in the company and enable effective communication between the workers and the management. Firms should be dynamic in nature to realize new market developments and employ necessary resources to seize the market opportunity. Therefore, distinctive competences set the foundation for a firm ability to interact competitively with the market consumers and retain a consistent market-oriented product differentiation aspect.


Colombo, M. G., & Grilli, L. (2005). Founders’ human capital and the growth of new technology-based firms: A competence-based view. Research policy,34(6), 795-816.
Eden, C., & Ackermann, F. (2010). Competences, distinctive competences, and core competences. A Focused Issue on Identifying, Building, and Linking Competences, 5, 3-33.
Mooney, A. (2007). Core competence, distinctive competence, and competitive advantage: What is the difference?. Journal of education for business, 83(2), 110-115.
Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance. Simon and Schuster.

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Distinctive Competences Essay Sample. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/distinctive-competences-essay-sample/. Published Dec 28, 2020. Accessed December 08, 2022.

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