Distinctive Capabilities

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Foundations of corporate success. Explanation of Distinctive Capabilities of John Kay.1993


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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 -

Distinctive Capabilities Forum
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4 Properties of Distinctive Capabilities

As pointed out by Kay, NOT ALL capabilities can pr...
Usage (application): Achieving a Competive Advantage

Customer Centricity: Success Factors for Customer Intimacy

Customer / Consumer Centricity (CC) is a frequentl...
Usage (application): Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM

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

According to Professor Todd Zenger, companies shou...
Usage (application): Inside-out Corporate Strategy, Corporate Visioning

Capabilities & Competitive Advantage (Grant)

In 1998 Grant first described the relationships be...
Usage (application): Shaping Strategy

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

Javidan (1998) has made a great contribution to an...
Usage (application): Core Competencies

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

This presentation compares Porter's competitive ad...
Usage (application): Business Strategy, Value Chain Management

Distinctive vs. Dynamic Capabilities

In this presentation it is about Distinctive Capab...
Usage (application): Inside-out Business Strategy

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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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