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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Forum about Distinctive Capabilities.

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

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4 Properties of Distinctive Capabilities

Achieving a Competive Advantage (...)

Customer Centricity: Success Factors for Customer Intimacy

Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM (...)

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

Inside-out Corporate Strategy, Corporate Visioning (...)

Capabilities & Competitive Advantage (Grant)

Shaping Strategy (...)
Information Sources

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

Core Competencies (...)

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

Business Strategy, Value Chain Management (...)

Distinctive vs. Dynamic Capabilities

Inside-out Business Strategy (...)

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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