Distinctive Capabilities

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What distinguishes the successful firm

How can business strategies add value? What distinguishes the successful firm is the fundamental question in business strategy, and one which most senior managers consistently ask themselves.

Companies with distinctive capabilities have attributes which others not have and cannot replicate, not even after they realize the benefit they offer to the company which originally possesses them.

In "Foundations of Corporate Success", John Kay argues that the best businesses derive their strength from a distinctive structure of relationships with employees, customers, and suppliers. He explains why continuity and stability in these relationships is essential for a flexible and co-operative response to change.

Three Distinctive Capabilities

According to John Kay, there are three Distinctive Capabilities which a company can possess to create added value and achieve competitive advantage through relationships:

  • Architecture. A structure of relational contacts within or around the organization with employees and with customers and suppliers.

  • Reputation. Built up through:

    • Customer's own experience.
    • Quality signals.
    • Demonstrations and free trials.
    • Warranty.
    • Guarantee.
    • Word of mouth spreading.
    • Association with other brands.
    • Staking the reputation once it is established.
  • Innovation. Provided the innovation is translated to competitive advantage successfully.

Book: John Kay - Foundations of Corporate Success

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Dynamic Capabilities
All of Kay's distinctive capabilities to achieve a competitive advantage are based on relationships.
But besides relationships, other capabilites could also be a source of competitive advantage....
🔥 NEW According to Kay there are 4 Distinctive Features
There are supposed to be 4 distinctive capabilities: architecture, reputation, innovation... and strategic assets....
Distinctive Competence?
Hi guys, can anyone explain to me what a distinctive competence is?...

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4 Properties of Distinctive Capabilities

Achieving a Competive Advantage
As pointed out by Kay, NOT ALL capabilities can provide an organization with competitive advantage; they need to have a ...

Customer Centricity: Success Factors for Customer Intimacy

Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM
Customer / Consumer Centricity (CC) is a frequently used concept used by companies to achieve competitive advantages. It...

A Corporate Theory: Long-term Handhold and Guidance in Turbulent Times?

Inside-out Corporate Strategy, Corporate Visioning
According to Professor Todd Zenger, companies should focus less on competitive advantage (this isn't what really interes...

Capabilities & Competitive Advantage (Grant)

Shaping Strategy
In 1998 Grant first described the relationships between resources, capabilities and competitive advantage. In his perspe...
Information Sources

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Definition, Differences and Relationships between Resources, Capabilities, Competencies and Core Competencies

Core Competencies
Javidan (1998) has made a great contribution to answering the question for the relationship / differences between resour...

Porter's Industrial Organization Versus Barney's Resource Based View

Business Strategy, Value Chain Management
This presentation compares Porter's competitive advantage thinking with Barney's Resource Based View, focusing on how co...

Distinctive vs. Dynamic Capabilities

Inside-out Business Strategy
In this presentation it is about Distinctive Capabilities and Dynamic Capabilities. Distinctive Capabilities are present...

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Compare with: Value Disciplines  |  Competitive Advantage  |  Rule of Three  |  Resource-Based View  |  Parenting Styles  |  Parenting Advantage  |  BCG Matrix  |  Growth Phases  |  Organizational Configurations  |  3C's  |  Acquisition Integration Approaches  |  Strategic Types

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